Oct 23, 2020 - Economy

Recent arrests suggest massive fraud in California's unemployment system

A person waits outside a closed office of California's Employment Development Department. Photo: Brian van der Brug/Los Angeles Times via Getty Images

Fraud in California's Employment Development Department (EDD) was so rampant and seemingly easy to exploit that one Los Angeles rapper was arrested recently after making a song and video about doing it.

What's happening: In a historic example of snitching on oneself in an effort to clout chase, rapper Fontrell Antonio Baines, aka Nuke Bizzle, describes how easy it is to get "rich off of EDD" in a music video posted to YouTube titled "EDD."

  • He was arrested last month in Las Vegas and prosecutors say he used stolen identities to file for $1.2 million in benefits through at least 92 debit cards that had been pre-loaded with fraudulently obtained benefits and mailed to different addresses.
  • More than $704,000 of these benefits were accessed through cash withdrawals, per the Daily Mail.

In a separate incident, Beverly Hills police arrested 44 people and confiscated 129 fraudulently obtained debit cards potentially worth more than $2.5 million in benefits issued by the state, the Los Angeles Times reported.

Yes, but: Even after the two-week pause, there is still a massive backlog of unemployment claims unprocessed in the state and its estimated 1.2 million claims won't be paid until late January.

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