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COVID-19 Jobless Claims Frozen In Wake Massive Fraud

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Sonora, CA – In the wake of millions in lost COVID-19 relief unemployment funds, California has frozen 1.4 million claims as it battles massive fraud.

This week, the state Employment Development Department (EDD) disclosed that it had examined existing claims from people who said they lost their jobs during the COVID-19 pandemic and found about 3.5 million claims were “potentially fraudulent,” reported the San Francisco Chronicle.

Nearly 2 million of those claims already have been disqualified and payments were suspended for about 1.4 million until they could be verified. EDD is actively contacting claimants to tell them how to prove their identities. The state has already admitted to being bilked out of hundreds of millions of dollars by fraudsters, including some in the name of U.S. Sen. Dianne Feinstein. The agency has also acknowledged that funds were sent to inmates in jails and prisons, including some on California’s death row and even in other states, as reported here on Thursday.

Since March, EDD has processed more than 16 million unemployment benefits and struggled to keep up with the demand, as at one point the backlog numbered more than 1.6 million people. Last month, Bank of America, which issues EDD benefit cards, notified state lawmakers it had identified about 345,000 fraudulent claims worth about $2 billion. EDD notes that figure is expected to go much higher. Widespread fraud was first detected in September, when citizens have reported finding unsolicited letters, some with debit cards inside, from the agency in their mailboxes, as detailed here.