• July 20, 2021

Special Hired Attorney in California Unemployment Fraud Investigation

Faced with widespread fraud in California’s unemployment benefit system, state officials said Tuesday they have hired former federal prosecutor McGregor Scott to serve as special counsel to assist in investigations of false claims filed by international criminal organizations, inmates and others.

Scott was the United States Attorney for the Eastern District of California until he resigned this year and was the leader of a task force of California prosecutors that announced an investigation into unemployment fraud in November.

The investigation was initiated by Scott and nine county prosecutors after they found evidence that thousands of fraudulent unemployment benefit claims were filed on behalf of California prison inmates, including those on death row. .

Since then, the state Employment Development Department has determined that more than $ 11 billion in benefits were paid for fraudulent claims, and there is an additional $ 19 billion in suspicious claims under investigation.

Last year, the state began matching claimants’ personal information against a list of inmates and hired a contractor to verify the identity of people applying for unemployment benefits.

“California took comprehensive action last year to identify and stop criminal unemployment fraud, and with the help of McGregor Scott we are taking another important step toward empowering prosecutors to crack down on those who engage in this criminal activity,” he said. Rita Sáenz, director of the EDD.

As a US attorney, Scott oversaw federal prosecutions in a district that included 34 counties from the Oregon border to Bakersfield. Scott, appointed by President Trump in 2018, resigned when President Biden took office this year.

He previously held the same position from 2003 to 2009 under President George W. Bush, and was twice elected Shasta County District Attorney.

Scott, whose title will be special fraud counsel, said Tuesday that he would work closely with a task force of state and local law enforcement agencies that was formed in November by Gov. Gavin Newsom. That group is overseen by the state Office of Emergency Services.

“State unemployment systems were attacked last year by sophisticated national and international organized fraud schemes,” Scott said in a statement. “We look forward to working with the EDD, Cal OES, and local, state, and federal prosecutors to identify, investigate, and prosecute those who stole benefits that rightfully belonged to the pockets of Californians in need.”

Scott, who is a partner at King & Spalding law firm, will be very busy. The group of prosecutors he was involved with estimated in November that fraudulent complaints involving 21,000 inmates could total $ 400 million.

The governor’s task force said in April that there had been 68 arrests and had opened another 1,641 investigations.

Additionally, federal officials who have made more than 500 arrests nationwide in unemployment fraud cases say much of the problem comes from international criminal organizations. Security experts say identity theft networks have submitted fraudulent unemployment claims from Russia, China, Nigeria, Ghana, Turkey and Bulgaria, among other countries.

Closer to home, former EDD employees have been implicated in fraud schemes, including one in December in which a former state worker was able to defraud more than $ 200,000 by filing claims on behalf of unknown victims, including U.S. Sen. Dianne Feinstein ( D-Calif.), Authorities said.

Scott’s role includes supporting state, federal and local efforts to prosecute alleged criminal activity and helping ensure criminal cases are referred to law enforcement agencies to hold criminals accountable and recover fraudulently paid benefits.

California Attorney. Gen. Rob Bonta, who has made the unemployment fraud investigation a priority since taking office in April, said Scott brings his experience to the investigations.

“The California Department of Justice was instrumental in uncovering last year’s unemployment fraud scheme; And from the beginning, we worked closely with then-US Attorney Scott to stop this illegal activity, ”Bonta said.

Leave a Reply

Your email address will not be published. Required fields are marked *