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IPFS News Link • California

California's Expanded COVID Unemployment System Corrupted By $2 Billion in Fraud, Report Finds

• https://fee.org, Brad Polumbo

Government bureaucrats aren't exactly known for their efficiency even in the best of times. But in the response to the economic crisis from COVID-19 and pandemic lockdowns, elected officials have sent taxpayer money flying out the door with even less diligence than usual.

The latest example comes courtesy of California. A new report from Bank of America, which contracts with the state, estimates that more than $2 billion in fraud is plaguing the state's expanded pandemic unemployment benefits system. The bank has identified 640,000 potentially fraudulent accounts.

"The bank said there were also 'numerous cases' in which multiple cards, including hundreds in some instances, have been sent to a single mailing address," the Los Angeles Times reports. "Other issues identified include multiple cards using a common contact phone number or address, and benefits issued to infants or children as well as centenarians or other elderly people not likely to be working."

This revelation comes just days after officials admitted the state sent an estimated $400 million in fraudulent unemployment benefits to current prisoners. The Times says this "tsunami" of fraud is "fueling street crime," as the dollars are funneled to criminal enterprises and gangs.

California's fraud-rife unemployment system is no outlier. Its dysfunction is part of a national trend.


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