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'I Have Never Seen Anything Like It': Bank Of America Says Fraudsters Have Stolen $2B In California EDD Funds

LOS ANGELES (CBSLA) — The California Employment Development Department Monday continued to reel from unprecedented scams carried out by fraudsters, many of them prisoners in the state duping the system with mind-boggling ease.

Bank of America, which contracts with EDD to distribute unemployment benefits said in a Monday statement:

"Our assessment is that there is activity consistent with fraud in those accounts on the order of approximately $2 billion. ... We also have detailed instances in which criminals not only withdrew initial funds provided by the State, but sought and received additional 'temporary' credit from Bank of America … essentially attempting to double-dip the fraudulent removal of funds."

Compounding the horrific scheme, the victims were people like Bradley Hunt, whose EDD money the scammers stole.

"One day, I was like just going to get food or going to pay a bill or something and I saw that I had no money, like insufficient funds," he said.

Hunt then spent hours and hours on hold with EDD before his call was answered.

"While I'm in the middle of finishing the transaction, or like reporting the claim, the phone goes, 'Beep beep beep,' and hangs up," he said.

RELATED: Thousands Still Unable To Access EDD Benefits From Bank Of America Due To Ongoing Fraud Suspicions

Eventually, Hunt received a letter from Bank of America that read, in part:

"Your claim has been closed because we believe the account or the claim have been the subject of fraud ... any related reimbursement of fees, has been or will be debited from your account."

The letter denying claims was sent out to a number of Bank of America fraud victims.

"The bank is saying, 'Oh, well there's nothing we can do,' and then EDD is saying, 'Well, you've got to talk to the bank.'"

Bak of America said it was adding more staff to review the claims and said people like Hunt would be able to appeal the bank's decision on their claims. But State Assemblyman Jim Patterson, R-Fresno, said he is beyond exasperated with the seemingly constant stream of problems at EDD.

"I have never seen anything like this in the 20 years I have been in public life," he said. "Today, our first organizing day of the new legislative session, there are at least a dozen bills, probably more, by Republicans, Democrats, people on the Assembly and Senate side that are basically saying, 'Here's how you're going to get your act together, EDD, and we're gonna force it by rule of law."

Bank of America says they are adding more staff to review these claims and say folks like Brad can appeal these letters… State Assemblyman Jim Patterson who has been spearheading reforms with EDD says he's beyond exasperated with the never ending problems at EDD.

Gov. Gavin Newsom's office said it was working with Bank of America and EDD to check on the fraud claims, though it could not immediately confirm the $2 billion figure released by the bank.

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