$1 Billion In False Unemployment Claims Paid To Inmates In California; “The Inmates Are Mocking Us” 

In California, authorities recently discovered that thousands of inmates throughout the state have carried out an elaborate unemployment benefits scam that may have totaled $1 billion.

Scott Peterson, who murdered his wife and unborn son in 2002, is among the inmates who defrauded the government by filing false unemployment claims. The claims were filed using false names and oftentimes false social security numbers, though some inmates opted to use their own personal information. Once approved, the benefits were paid either to inmates directly or to their loved ones. Between March and August, inmates in every California prison and jail filed 35,000 claims totaling $140 million in benefits.

Investigators in Kern County grew suspicious in September when large quantities of money orders began arriving for inmates.  

“Quite frankly, the inmates are mocking us,”  said district attorney Cynthia Zimmer

Aside from Scott Peterson, several serial killers and 133 of the state’s 700 death row inmates received the illegitimate funds, resulting in $420,000 being paid to them alone.  Recipients included Cary Stayner, who murdered four people near Yosemite National Park in 1999, and Susan Eubanks, who murdered her four sons in 1996.

“The fraud is honestly staggering,” said Sacramento County District Attorney Anne Marie Schubert.

On Tuesday, prosecutors said that the scheme might be the largest fraud scheme in California history. The state’s unemployment system has come into question since the beginning of the pandemic for being susceptible to potential fraud due to the large quantities of cash it was paying out with very lax review processes.

California Governor Gavin Newsom is appalled by the fraud, calling it “absolutely unacceptable.” In a statement to NBC Los Angeles, he revealed that he would be directing emergency services to assemble a task force that will extensively investigate the prison system’s unemployment fraud problem. 

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