{"id":2343788,"date":"2024-09-20T08:21:59","date_gmt":"2024-09-20T12:21:59","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/report-californias-covid-fraud-was-much-worse-than-you-think\/"},"modified":"2024-09-20T08:26:04","modified_gmt":"2024-09-20T12:26:04","slug":"report-californias-covid-fraud-was-much-worse-than-you-think","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/report-californias-covid-fraud-was-much-worse-than-you-think\/","title":{"rendered":"Report: California&#8217;s Covid Fraud Was Much Worse Than You Think"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Freport-californias-covid-fraud-was-much-worse-than-you-think%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2343788&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The summary reveals the extent of fraud and government incompetence that occurred during the COVID-19 pandemic, focusing on findings from the House Oversight Committee&#8217;s recent report. This report highlights \u2064the rise of pandemic-related scams,\u2064 particularly at the state level, where unemployment benefits are administered. It illustrates how <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/pentagon-to-use-jbsa-lackland-fort-bliss-to-house-unaccompanied-migrant-children\/\" title=\"Pentagon to use JBSA-Lackland, Fort Bliss to house unaccompanied migrant children\">poor decisions made<\/a> by state officials facilitated identity fraud and other scams. A notable case involved an individual hired by the Massachusetts Department of Unemployment Assistance soon\u200b after being released from prison for identity theft, \u2062raising \u2064questions about the hiring practices of\u2062 government agencies.<\/p>\n<p>California is specifically highlighted \u200das a state \u200cwith severe issues in its unemployment\u2062 system, with estimates of fraud\u2062 reaching between $20-32 billion. Many \u2063legitimate claims faced delays and denials due\u200b to the outdated systems. The state&#8217;s method of processing\u2062 claims favored fraudsters, and California failed\u200d to adequately cross-reference applications \u2063against \u200cprison records, leading to significant payments to \u200cinmates. <\/p>\n<p>The report criticizes California officials, particularly Julie Su, for ignoring warnings about the need to upgrade systems to prevent fraudulent claims. The ultimate concern is \u200bthat these failures will result in taxpayers, either federally or locally, having to cover\u2064 the financial consequences of the\u2062 incompetence exhibited by those in\u2063 charge.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>How bad was the scale of fraud &mdash; and the governmental incompetence that permitted it &mdash; during Covid? Unfortunately, prosecutors and federal officials are still tallying up the damage.<\/p>\n<p>The House Oversight Committee recently released a <a href=\"https:\/\/oversight.house.gov\/wp-content\/uploads\/2024\/09\/UI-Report-FINAL.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">report<\/a> summarizing its own findings on the proliferation of pandemic scams. While other <a href=\"https:\/\/www.gao.gov\/assets\/gao-23-106696.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">federal<\/a> <a href=\"https:\/\/www.oig.dol.gov\/public\/reports\/oa\/2022\/19-22-005-03-315.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">analyses<\/a> have focused on the <a href=\"https:\/\/thefederalist.com\/2023\/09\/20\/new-report-nearly-triples-estimated-amount-covid-fraudsters-stole-in-unemployment-benefits\/\" target=\"_blank\" rel=\"noreferrer noopener\">effects at the federal level<\/a>, the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fbi-worked-with-compromised-ukrainian-intel-agency-to-censor-americans-report-says\/\" title=\"FBI collaborated with &#039;compromised&#039; Ukrainian intel agency to censor Americans, per report.\">committee report showed<\/a> how incompetence at the state level, where unemployment benefits actually get administered, sowed the seeds for the Covid-era grifts.<\/p>\n<h2><strong>Invitation to Criminals<\/strong><\/h2>\n<p>The House investigation examined how numerous state decisions made identity fraud and other scams a near-certainty. For instance, the report references this nugget from a federal Justice Department <a href=\"https:\/\/www.justice.gov\/usao-ma\/pr\/former-new-bedford-man-pleads-guilty-false-pandemic-unemployment-claims\" target=\"_blank\" rel=\"noreferrer noopener\">press release<\/a> announcing that a married couple had agreed to plead guilty to wire fraud charges:<\/p>\n<blockquote>\n<p>According to court documents, Tiffany [Pacheco] was hired by the Massachusetts Department of Unemployment Assistance (DUA) in April 2020, <strong><em>shortly after her release from federal prison following a conviction for <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/he-fraudulently-claimed-coronavirus-relief-funds-then-faked-his-suicide-to-avoid-prosecution-now-hes-agreed-to-plead-guilty\/\" title=\"He Fraudulently Claimed Coronavirus Relief Funds, Then Faked His Suicide To Avoid Prosecution. Now He\u2019s Agreed To Plead Guilty.\">aggravated identity theft<\/a><\/em><\/strong>. While employed by DUA, Tiffany allegedly misused her position to submit fraudulent [unemployment] claim information on behalf of herself and her husband, Arthur, who was incarcerated in Texas until September 4, 2020, and thus ineligible for [unemployment] funds. (Emphasis mine.)<\/p>\n<\/blockquote>\n<p>The only natural response consists of one word: <em>Really<\/em>? One can read that paragraph over and over again to try to make sense of it &mdash; a government agency hiring someone just out of prison after a federal identity fraud conviction and placing her in a position with access to names, Social Security numbers, and other personal information allowing said individual to engage in more identity theft. Honest, hard-working taxpayers can only wonder why the Justice Department didn&rsquo;t try to charge the Massachusetts official who hired Mrs. Pacheco with First-Degree Stupidity.<\/p>\n<h2><strong>Golden State Grift<\/strong><\/h2>\n<p>Of all the states that suffered problems with their unemployment systems during the pandemic, California stands out, with <a href=\"https:\/\/calmatters.org\/economy\/2023\/11\/california-unemployment-covid\/?series=california-unemployment-crash\" target=\"_blank\" rel=\"noreferrer noopener\">estimates<\/a> of fraud in the Golden State alone ranging from $20-32 billion.<\/p>\n<p>California&rsquo;s obsolete and clunky unemployment systems didn&rsquo;t just cause harm by leading crooks to defraud taxpayers. In many cases, legitimate applicants couldn&rsquo;t receive the benefits they needed to get them through the Covid lockdowns. Some <a href=\"https:\/\/calmatters.org\/economy\/2023\/11\/california-unemployment-covid\/?series=california-unemployment-crash\" target=\"_blank\" rel=\"noreferrer noopener\">5 million applicants<\/a> reportedly had their benefits improperly delayed, with at least 1 million wrongly denied. <\/p>\n<p>When authorities froze debit cards to crack down on fraud, thousands of legitimate claimants saw their benefits cut off too. (The state&rsquo;s systems were too old and decrepit to deposit benefits directly into recipients&rsquo; bank accounts, creating another source of fraud via the debit cards.) California officials also reportedly refused benefits to 3.4 million workers for not sending in required documents &mdash; even as the average state unemployment office had 450 pounds of unopened mail and no way to process it.<\/p>\n<p>In short, the system in California was rigged in favor of fraudsters. Crooks who copy-pasted information from stolen identities sailed through the state&rsquo;s minimal fraud checks, while individuals who made an inadvertent typo on their application suffered from months of delays. Honest taxpayers also had their risk of fraud increased by the state itself, which sent out <a href=\"https:\/\/calmatters.org\/economy\/2023\/11\/california-unemployment-covid\/?series=california-unemployment-crash\" target=\"_blank\" rel=\"noreferrer noopener\">38 million pieces of mail<\/a> with full Social Security numbers, &ldquo;sometimes to wrong addresses, sometimes visible through envelopes,&rdquo; according to Cal Matters.<\/p>\n<p>California was one of several states that didn&rsquo;t cross-reference unemployment applications against prison and jail populations. As a result, the state paid out <a href=\"https:\/\/calmatters.org\/newsletters\/whatmatters\/2020\/11\/california-edd-fraud-claims-inmates\/\" target=\"_blank\" rel=\"noreferrer noopener\">as much as $1 billion<\/a> in fraudulent claims for inmates, including those who applied under such names as &ldquo;Poopy Britches.&rdquo; (Given the <a href=\"https:\/\/openthebooks.substack.com\/p\/updated-the-san-francisco-poop-map\" target=\"_blank\" rel=\"noreferrer noopener\">problem of public defecation<\/a> in the <a href=\"https:\/\/www.openthebooks.com\/maps\/?Map=90059&amp;MapType=Pin&amp;Zip=94110\" target=\"_blank\" rel=\"noreferrer noopener\">Golden State<\/a>, this moniker seems particularly inapt.)&nbsp;<\/p>\n<h2><strong>Rewarding Incompetence<\/strong><\/h2>\n<p>Much of the House Oversight report focuses on California&rsquo;s inability to respond to basic questions from federal authorities about the data relating to its unemployment program. Julie Su, who headed the state&rsquo;s Labor Department for the first 18 months of the pandemic, comes in for particular criticism.<\/p>\n<p>Su, like other California officials, ignored numerous warnings from government auditors that the state needed to modernize its archaic unemployment systems, to prevent the types of massive fraud that plagued the state during the pandemic. Now, having come to Washington to serve as acting labor secretary, she refused to answer the committee&rsquo;s questions about whether she will use her federal authority to waive the loans that California had to take to pay out unemployment benefits during the pandemic, effectively bailing out California for her own incompetence.<\/p>\n<p>Therein lies the real scandal: elected and appointed officials fobbing their own incompetence off on taxpayers. When it comes to California, either federal taxpayers will bail out the state, or California businesses will have to pay higher unemployment tax rates to offset the money paid out to crooks and criminals during Covid. Very few of the criminals, some of whom went so far as to make <a href=\"https:\/\/www.justice.gov\/usao-cdca\/pr\/rapper-who-bragged-about-unemployment-benefits-scam-music-video-arrested-allegedly\" target=\"_blank\" rel=\"noreferrer noopener\">YouTube videos<\/a> bragging about their scams (&ldquo;You gotta sell cocaine &mdash; I just file a claim&rdquo;), will get held to account.<\/p>\n<p>Gov. Gavin Newsom, D-<a href=\"https:\/\/thefederalist.com\/2020\/11\/17\/california-governor-breaks-his-own-covid-rules-to-eat-fancy-french-food-while-americans-go-hungry-in-lockdown\/\" target=\"_blank\" rel=\"noreferrer noopener\">French Laundry<\/a>, knows full well about the pandemic meltdown in the unemployment system that occurred on his watch. When Julie Su still worked in California, one of Newsom&rsquo;s assistants reportedly <a href=\"https:\/\/calmatters.org\/economy\/2023\/11\/california-unemployment-covid\/?series=california-unemployment-crash\">emailed her<\/a> noting that Newsom&rsquo;s own Social Security number had been used to make a fraudulent claim for unemployment.<\/p>\n<p>But Newsom had a cabinet secretary, not to mention myriad other officials, at his beck and call to solve the problem when identity thieves targeted <em>him<\/em>. Millions of other Californians trapped in a bureaucratic nightmare of Newsom&rsquo;s making, however, had no such special privileges. For this reason, some may argue that the true form of accountability (not to mention poetic justice) would come when Newsom faces unemployment himself.<\/p>\n<hr>\n<p>      Chris Jacobs is founder and CEO of Juniper Research Group, a policy consulting firm based in Washington, and author of the book &#8220;<a href=\"https:\/\/www.amazon.com\/dp\/1645720020\">The Case Against Single Payer<\/a>.&#8221; He appeared in the 1995 &#8220;Jeopardy!&#8221; Teen Tournament and is on Twitter: <a href=\"http:\/\/twitter.com\/chrisjacobsHC\">@chrisjacobsHC<\/a>.<\/p>\n<\/p><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>How extensive was the fraud and governmental ineptitude during the Covid pandemic? Sadly, prosecutors and federal officials are still assessing the extent of the damage. The House Oversight Committee has recently published a report detailing its findings on the surge of scams related to the pandemic. While other federal investigations have primarily looked at impacts at the national level, this committee&#8217;s report highlights how failures at the state level\u2014where unemployment benefits are actually distributed\u2014created opportunities for fraud during Covid.<\/p>\n<p>The House investigation revealed that various decisions made by states effectively guaranteed identity theft and other fraudulent activities. For example, one part of the report cites a press release from the Justice Department about a couple pleading guilty to wire fraud charges: Tiffany Pacheco was hired by Massachusetts&#8217; Department of Unemployment Assistance (DUA) in April 2020 shortly after being released from prison for aggravated identity theft. While working there, she allegedly exploited her position to file fraudulent unemployment claims for herself and her husband Arthur, who was incarcerated in Texas at that time and thus not eligible for benefits. This raises an incredulous question: How could a government agency hire someone with such a background?<\/p>\n<p>California stands out among states with significant issues in their unemployment systems during this period, with estimates suggesting that fraud there ranged between $20 billion to $32 billion. The state&#8217;s outdated unemployment infrastructure not only allowed criminals to defraud taxpayers but also hindered legitimate applicants from receiving necessary support during lockdowns; around 5 million applicants faced improper delays in their benefits, while over 1 million were wrongly denied assistance.<\/p>\n<p>When authorities attempted to combat fraud by freezing debit cards used for benefit distribution, many legitimate claimants found their access cut off as well due to California&#8217;s antiquated systems which couldn&#8217;t directly deposit funds into bank accounts\u2014a vulnerability exploited through debit card use. Additionally, California officials denied benefits to 3.4 million workers who failed to submit required documents despite having an overwhelming backlog of unopened mail.<\/p>\n<p>In essence, California\u2019s system favored scammers; those using stolen identities easily bypassed minimal checks while honest applicants faced lengthy delays over minor errors on their applications. Moreover, taxpayers were further exposed when state officials mailed out millions of documents containing full Social Security numbers\u2014sometimes sent incorrectly or visible through envelopes.<\/p>\n<p>California also failed to cross-check unemployment applications against prison records leading it to pay up to $1 billion in fraudulent claims filed by inmates using ridiculous aliases like &#8220;Poopy Britches.&#8221;<\/p>\n<p>The House Oversight report heavily criticizes California\u2019s inability or unwillingness to respond adequately when questioned about its unemployment program data by federal authorities. Julie Su\u2014the head of California&#8217;s Labor Department during much of this crisis\u2014is particularly scrutinized for ignoring repeated warnings about modernizing outdated systems that contributed significantly to rampant fraud.<\/p>\n<p>Now serving as acting labor secretary in Washington D.C., Su has declined questions regarding whether she will utilize her federal authority concerning loans taken out by California due largely due incompetence within her own department\u2014a situation where taxpayers may end up footing the bill either through bailouts or increased taxes on businesses affected by these losses.<\/p>\n<p>Ultimately, it appears elected officials are shifting responsibility onto taxpayers rather than addressing their own failings directly. Governor Gavin Newsom is acutely aware of these issues since they unfolded under his administration; even he received notice that his Social Security number had been misused for fraudulent claims while he had resources available unlike countless Californians ensnared within bureaucratic chaos created under his leadership\u2014leading some critics suggest true accountability would mean facing consequences himself<\/p>\n","protected":false},"author":521,"featured_media":2343789,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2024\/09\/Gavin-Newsom-2020-09-09.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[4045,40093,41311,3976,3819],"class_list":["post-2343788","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-california","tag-covid-fraud","tag-financial-misconduct","tag-investigation","tag-report"],"fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2024\/09\/Gavin-Newsom-2020-09-09.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2343788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2343788"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2343788\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2343789"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2343788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2343788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2343788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}