Scam leads California to pay millions of dollars in unemployment to convicts

SAN DIEGO (KUSI) – California inmates, including some on death row, have received tens of millions of dollars in state unemployment benefits in the past few months.

A group of state and federal prosecutors say Scott Peterson, arrested here in San Diego, and convicted of killing his wife and unborn child, is one of the inmates who was being paid unemployment.

Now, prosecutors are investigating what they call the most significant taxpayer fraud in California history.

The San Diego Union Tribune reported, “The D.A.s called the situation “the most significant fraud on taxpayer funds in California history,” according to a letter obtained by the Los Angeles Times, describing fraud that involves identity theft of prisoners as well as alleged scams by individual inmates and organized gangs to game the state system. “It is a manifest problem that cannot be ignored, and the governor needs to take steps to address it,” said McGregor Scott, U.S. attorney for the Eastern District of California.”

Continuing, “EDD officials said confidentiality rules prevented them from confirming that benefits had been paid to Peterson, Stayner and Aguirre. Schubert and Zimmer said the alleged fraud was taking multiple forms. Some claims may have been submitted by inmates directly or by family and friends to whom they gave their personal information. Other inmates may be unwitting victims. Instances of large-scale organized schemes have also been found, prosecutors said, including possible involvement of prison gangs.”

El Dorado County DA and President of the CA District Attorney’s Association, Vern Pierson, discussed the issue on KUSI’s Good Evening San Diego.

The San Diego Union Tribune’s full story on the issue can be read here.

Categories: California News, Good Evening San Diego, Politics