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California paid out $11 billion in fraudulent jobless claims in 2020, officials say

Massive unemployment fraud scheme in California
Massive unemployment fraud scheme in Californ... 03:26

California paid out $11 billion in bogus jobless claims in 2020, and investigators are looking into possible fraud involving $20 billion more, authorities said Monday, according to CBS Los Angeles

Between March 2020 and January 16, 2021, the California Employment Development Department processed 19.5 million claims and paid out $114 billion in unemployment benefits — roughly 9.7% of which were paid out to fraudulent claims, the agency said. 

The employment department also identified that up to an additional 17% of payments made during this time have been made to potentially fraudulent claims, which are currently being investigated, officials said.

California processed a record amount of unemployment benefit claims in 2020, primarily driven by the COVID-19 pandemic, resulting in more than five times as many unemployment claims in 2020 than in 2010, the worst full year of the Great Recession.

The agency said the employment department processed as many claims within the first eight weeks of the pandemic shut down as it did during all of 2010.

"EDD is now working with some of the country's most successful fraud prevention businesses and law enforcement agencies to protect the state's unemployment benefit system," said California Labor and Workforce Development Agency Secretary Julie Su. "We know that many Californians are waiting on payments, and EDD is working quickly to validate their claims and get their benefits to them."

The announcement comes on the heels of multiple CBSLA investigations that found alleged cases of rampant EDD fraud, including involving Bank of America customers who said their accounts were frozen after apparent cases of fraud.

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