2 On Your Side: Despite 2-Week EDD Pause, Homeowners Still Getting Dozens Of Potentially Fraudulent Letters
LOS ANGELES (CBSLA) — While the state is in the middle of investigating possible unemployment fraud, local homeowners say they're still getting Employment Development Department letters mailed to their homes, but addressed to other people.
At first, homeowner Mike Weaver said there were a few letters followed by a few more. And then one day, the post office worker brought dozens of EDD letters addressed to a number of different people to his door in a mail bin.
"Our mailman showed it to us, and it was literally the whole container ... completely full," Weaver said.
Weaver lives in Canyon Country. He lost his job as a tow truck driver and his wife lost her job as a retail manager when the coronavirus pandemic hit.
The both were able to get their unemployment benefits without issue, but the latest letters are not their claims. The couple says the letters starting rolling in right after they placed their home on the market.
The Weavers are moving to Texas, because they say they cannot afford to live in California any longer.
"People that live across the street from me, people that live down the street from me, we're all laid off and we're struggling," Weaver said. "And yet, people from out of town come in and don't even live in California and get $20,000."
Earlier this week, Beverly Hills police arrested 87 people who were in possession of 181 EDD cards with an estimated value of $3.6 million. Investigators said the suspects — 90% of whom were reportedly not California residents —were using the fraudulently obtained cards to buy pricey goods on Rodeo Drive.
"Any time you have a state as large as California, and certainly we got hit hard by COVID so we had a lot of shutdowns and unemployment insurance went up, that means that bad actors can really hide within the heard," Jon Coss, an anti-fraud expert with Thomson Reuters who has worked with EDD in the past, said. "The incidents of fraud are unlike anything I've seen before, and I've been doing this for over 20 years."
Coss said he believes organized rings are behind much of the fraud and are coming from both inside and outside the United States.
"I can use a disposable email," Coss said. "I can spoof my ID so, literally, I can be applying for California unemployment from a foreign country and, technically, you wouldn't be able to see that. I can easily buy identities off the dark web."
And while EDD is stopping new claims for two weeks to tackle the possibly widespread fraud, Coss said he believes it will take months, or even years, for the department to fully clean up the damage done.
During the pause, EDD said it would also be tackling a backlog of more than 500,000 pending claims.
