California Fraud Raises Questions Where COVID Relief Money is Going

Griffith Park, Los Angeles, California, USA.

A massive fraud scheme has left thousands of people unable to access their relief funds after Bank of America was forced to freeze benefit accounts, according to their Employment Development Department (EDD).

California, the nation’s most populous state, has processed more than 16 million unemployment benefits claims since March and paid out $113 billion. The Employment Development Department has struggled to keep up with the demand, facing intense pressure to work through a backlog that at one time numbered more than 1.6 million people.[1] The demand however has allowed many criminal actors to slip and take some of the money for themselves. Using prisoner’s names such as Drew Peterson and even fraudulently using Senator Diane Feinstein’s name, criminal actors were able to trick the system into giving them Bank of America bankcards with said funds and funnel it to various criminal enterprises including some in China and Russia. The current lost estimates are a staggering $9.8 Billion dollars.

As a stopgap, both the EDD and Bank of America put a freeze on the accounts. Unfortunately, while they were attempting to hit the fakes, they also hit legitimate accounts too. As a result, many are caught in a merry go round with both sides blaming each other for the closure. According to CBS, “EDD told CBS News anyone whose accounts were recently frozen by the state must verify their identity for the state to resume payments. But they said if the bank has flagged potential fraudulent claims, only Bank of America can resolve those issues.”[2]

In the light of these frauds occurring, its more imperative than ever that people be mindful of their information online. Malicious actors are always searching for low hanging fruit such as relief money.

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[1] https://www.ktvu.com/news/california-unemployment-fraud-could-top-9-8-billion

[2] https://www.cbsnews.com/news/california-unemployment-fraud-edd-bank-of-america/

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