California officials who turned a blind eye tounemployment scams— potentially worth tens of billions during the pandemic — will now be put directly under the microscope of the federal government.
The U.S. Department of Labor is set to send a letter to the state’s Employment Development Department announcing a “strike team” will soon be touching down in the Golden State to root out theft and abuse, The California Post has learned. The investigation will be similar to efforts currently underway in Minnesota.
“Financial issues and potential fraud in California’s unemployment insurance program will be fully examined,” Labor Secretary Lori Chavez-DeRemer told The Post in a statement, while also taking a shot at former President Joe Biden.
“The previous administration turned a blind eye toward failing Labor programs: This ends now.”
Federal investigators have been combing through financial records tied to Minnesota fraud schemes after prosecutors uncovered what they describe as a sprawling web of pandemic-era theft, includingthe massive “Feeding Our Future” casethat allegedly siphoned roughly $250 million in federal child-nutrition funds through fake claims and shell companies.
In total, a staggering$9 billion may have been stolen in Minnesota, according to federal prosecutors. Nearly 100 people had been charged with crimes as of last month.
The breadth of fraud in California, however, could leave Minnesota’s thievery looking like chump change.
The feds provided California nearly $290 billion in relief funds during the pandemic, and EDD was among the largest recipients as it was tasked with rapidly implementing expanded unemployment benefits.
In 2023, state auditors issued a report that foundEDD made huge missteps in preventing fraud, allowing billions of dollars in unemployment payouts that may have been fraudulent. The total tab was estimated to be as high as tens of billions.
Investigators have not always had to look too far to find the culprits.
Source: California Post – Breaking California News, Photos & Videos
