Tipline Investigation: Fraud and backlog at California unemployment department leads to ‘major overhaul’

SANTA BARBARA, Calif - A new report by a California Employment Development Department Strike Team confirmed what many people have suspected for months. The EDD, which processes unemployment benefits claims for millions of out-of-work Californians needs a "major overhaul" to clear a backlog of nearly 1.6 million unresolved claims and identify fraud within the system.

On Saturday, the EDD released a blueprint to get past the current crisis and hopefully avoid more problems in the future. The plan involves modernizing technology to speed up claims processing and reduce fraud. The EDD also implemented a two week 'reset' period. It will not accept any new applications for unemployment insurance benefits and use the next two weeks to reduce the backlog of claims already in the system.

If you are one of the Californians who applied back in March and April and still have not received any benefits this might be good news. However, EDD officials still admit it could take through January, 2021 to resolve the bulk of the backlog. Sadly, many viewers who've been contacting our NewsChannel Tipline describe being in a desperate situation already. Some have moved in with relatives, some are relying on friends and many of them said the bills are piling up fast with no way to pay them. They will have a very difficult time waiting another 3 to 4 months to receive their benefits.

EDD officials suggest anyone with questions continue to check their online account and go to the EDD website, specifically the frequently asked questions section.

The fraud in the system effects every Californian in some way from stolen tax dollars to mail delivery. If you are receiving letters from EDD at your home addressed to people you don't know, there is a possibility it's connected to fraud. These letters tend to show up in groups of three or four and sometimes dozens of these letters will arrive all at once.

Santa Barbara area resident Ron Yttri contacted The NewsChannel Tipline when 22 EDD letters addressed to different people showed up in his mailbox. They all arrived on the same day. He said he tried to contact EDD first but couldn't reach anyone. Then he checked online and saw how many people around the country had the same experience and that state officials believe it is linked to some sort of fraud.

"That's what alarmed me the most, that just seemed like the amount, I opened up a couple of the letters to see what they were about. I could see they were basically getting at least $400 to $500 a week and it was just telling them that either their amount went up, down, you multiply that by 22 and you do the math and it comes up to a lot of money. I'm just alarmed by this one particular scam coming to my address and the dollar amount loss to the state," said Yttri.

If you receive these letters, EDD officials request the following:

• Send any fraudulent documents or mail directly to EDD investigators through EDD PO Box 826880, MIC 43, Sacramento, CA 94280-0225.
• Or you can write “Return to Sender” on the envelope and provide it to your mail carrier. Envelopes that may contain debit cards that have yet to be activated can also be returned to sender. The cards are sent on behalf of the Bank of America from an address in Tennessee.

We will have more tonight on NewsChannel 12 at 6 p.m.