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NewsChannel 3 Investigates

Tipline Investigation: Unemployment scams steal hope from desperate Californians

SANTA BARBARA, Calif. - Our series of reports on fraud and stolen taxpayer money at the California Employment Development Department (EDD) has focused on a broken system.

But what’s happening right now is about more than stolen money. The criminals are stealing people’s livelihoods and sense of security at a time when they are already struggling to survive during the pandemic.

“I need help. I live in a trailer, it’s falling apart, my husband lost his job and we’re living on Social Security which is under $300 a month,” said a woman who cried during her call to our NewsChannel Tipline.

“I have no insurance on the car. So, I’m afraid my registration is going to stop (inaudible crying) and  that was hard for me," said another the tearful caller.

A man called our Tipline sobbing so hard we could hardly understand what he was saying, "I’ve been displaced due to the fire. I’m teaching my daughter (crying- inaudible) in our car. My EDD benefits turned off three weeks ago."

Those are just a few of the heart wrenching calls to our Tipline. People who lost their jobs during the pandemic shutdown filed for unemployment benefits through the EDD and many have received nothing.

Our previous reports have shined a spotlight on an antiquated government system caught flat-footed by the pandemic and a flood of unemployment claims when everything shutdown in mid-March to stop the spread of COVID-19. Many people who filed claims with EDD for unemployment benefits back in March and April have received no money and can't get through on the phone to get answers.

But there's another reason for the suffering. Scammers who seem to know the flaws in the EDD system, better than the state officials who run it.

“Somebody opened up an EDD claim in my name, had opened it with a driver’s license from Maryland, had changed my mailing address to a mailing address in Los Angeles and that they had already collected $17,550,” described Tamra Carroll during an interview with the NewsChannel.

Carroll lives in Ventura County. She said she never filed that claim. Instead, she was told by an EDD representative that it appeared someone used her stolen identity to submit the bogus claim. She also said an EDD official told her the crooks filed the bogus claim on August 27, backdated the claim to February and got the money on September 4. 

How could the crooks get almost $18,000 from EDD in just 9 days when many unemployed Californians have been waiting 7 months for their benefits, received no money and can’t even get their phone calls returned? We’ve asked EDD officials about Carroll’s case several times and so far they have not given us an explanation.

“It’s just so sad because people who truly need the money aren’t getting it because they are spending so much time on all of these fraud claims,” said Carroll.

Carroll said the scammers had all of her EDD mail sent to an address on West 3rd Street near downtown Los Angeles. NewsChannel 3 went to that address and discovered it’s a gated apartment building. We even tried talking with the people living in the apartment where the EDD mail was sent. We left a message on a recording at the entry gate, but we did not receive a call back. We did talk with people who live in the building now who believe the apartment is being sub-let to several people who they don’t know.

In recent weeks, police in nearby Beverly Hills and Burbank have arrested dozens of alleged EDD thieves. Authorities said they caught the crooks with stacks of stolen EDD debit cards worth millions of dollars. Investigators said most of the suspects are from out of state who spent the money on luxury vehicles, expensive restaurants and short-term rentals. Beverly Hills Police also seized 7 handguns.

“These individuals are sophisticated and they’re dangerous,” said State Assemblyman Jim Patterson who represents Fresno.

Patterson said, in some cases, the scammers redirect the mail to empty homes, on the market for example, so they can easily intercept it. In other cases, he said they’ve posed as EDD employees, broken into homes and even offered to pay the homeowner to get those letters.

“These individuals are tracking these addresses. They know that these homes are receiving them and they are in many instances scoping them out,” said Patterson.

Meanwhile, Tamra Carroll has been forced to cancel all of her credit cards, freeze other accounts and file police reports to hopefully reclaim her identity.

“I mean, it’s just turned my world upside down,” said Carroll.

And more heartbreaking phone calls keep coming into our Tipline.

“We’ve received nothing and we’re leaving our apartment now. We’ve lost possessions. We’re in debt. Can you please resolve our problem,” said another person who called our Tipline desperate for help.

NewsChannel 3 did make numerous attempts to get a comment from EDD officials for this story. We are still waiting for a reply.

Representative Jim Patterson also offered advice to people who receive letters from the EDD at their home addressed to other people. These letters can show up in groups of three or four, sometimes dozens will arrive in the mail all at once. Some are stamped urgent and appear to have a debit card inside. That's what the crooks are after.

Patterson recommends you either destroy them, pack them up and send them back to the EDD together in a large envelope, but he suggested not putting 'return to sender' on them and putting them back in your mailbox or outside your home.

California / Community / Crime / Lifestyle / Money and Business / San Luis Obispo County / Santa Barbara- S County / Santa Maria - Lompoc - North County / Ventura County / Your Money

C.J. Ward

C.J. Ward is the evening anchor for KEYT NewsChannel 3 and the station’s lead investigative reporter.

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