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Local prosecutors weigh in on inmate unemployment fraud scandal

California Inmates scam unemployment department out of millions of dollars
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SANTA BARBARA, Calif. - Local prosecutors have been investigating allegations of jail and prison inmates swindling California out of unemployment benefits.

Santa Barbara County Chief Deputy District Attorney John Savrnoch said,
"It is a massive problem. When we were exposed to it we contacted other counties. Each county that looked into the matter found out that their jails were involved this is a truly massive statewide fraud that we are just beginning to get a handle on how we are going to address it."

San Luis Obispo District Attorney Dan Dow had some tough words for the Employment Development Department, better known as the unemployment office.

"What I am really frustrated by, even more than that the criminals putting in the fraudulent claims, is the ineptitude and the negligence, in my opinion, by the bureaucrats and those responsible working for the EDD that have allowed a system that can be defrauded like this," said Dow.

Dow wants to know how it was allowed to happen.

"The taxpayers of California are owed and explanation and people responsible for such as system need to be held accountable,"

Rapists and killers with local ties are among those named in the case.

Scott Peterson killed his wife Laci and their unborn child in 2002, and Rex Allen Krebs kidnapped, raped and murdered Cal Poly student Rachel Newhouse and Cuesta College student Aundria Crawford more than two decades ago.

Both are in San Quentin.

"Not only is there wide spread fraud by prison inmates, but people like Rex Krebs on death row, where we don't have much of an option to sanction them any further than the death sentence he has already received," said Dow.

They could face restitution but getting the money back may be difficult.

"The investigation going on is statewide it appears there are inmates in all 58 county jails and in every CDCR (California Department of Corrections) facility that are collecting unemployment while they are in custody. They are illegally receiving benefits or their identify has been stolen and someone has been receiving in their name. In any event someone incarcerated a long time is not eligible. We are involved the same, the same as every other county in the state was involved. Some estimated the fraud regarding the inmates and others could approach a $ billion. Restitution is required in any criminal conviction, but that also requires the individual subject to the order to have the means to pay it. Longtime inmates or life sentence, the chances of recovery are fairly slim." said Savrnoch.

A task force is being created to help coordinate and support district attorneys around the state.

Article Topic Follows: Crime & Courts

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Tracy Lehr

Tracy Lehr is a reporter and the weekend anchor for News Channel 3-12. To learn more about Tracy, click here


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