LOS ANGELES (CBSLA) — The state is spending millions of dollars with high-tech companies to try and stop unemployment fraud at the California Employment Development Department, but some scammers might be using a pre-internet method to outsmart the system.
Sources recently told CBS Los Angeles Investigative Reporter David Goldstein that faxes have been coming in fast and furious since the last stimulus plan extended unemployment benefits.READ MORE: President Biden, Russian President Putin Meet In Geneva
Faxes obtained show claims coming from area codes all across the country with people looking for checks, claiming they’re out of work from jobs in California. There was a fax from the 240 area code in Maryland, the 617 area code in Boston, the 615 area code in Nashville and even an 876 area code from Jamaica.
And while it is not illegal to collect unemployment if you moved to another state and legitimately lost your job in California, experts said the large number of faxes coming in are a telltale sign of potential fraud.
Blake Hall, founder of ID.me, said sending information via fax sounded like a way to get around his company’s identity verification process. The state previously signed a multi-million dollar contract with the company to verify filers’ identities in an effort to cut down on fraud.
But now it seems that scammers have figured out yet another way around the safeguard.
“If they realize I can fax something in or I can use the mail-in channel, and ID.me’s verification isn’t there, then they’re always looking for a process that can defraud the state,” Hall said. “That’s the weak link in the chain, so to speak.”READ MORE: Crews Battle Brush Fire In Santa Fe Dam Area Of Irwindale
Documents obtained by CBSLA also showed people living in California might be trying to scam the system by fax, including a person named Xavier who filed twice from a 323 area code — once to make a claim for a 108-year-old unemployed worker born in 1913.
“Scammers know that California EDD has been a target of opportunity to say the least, so I’m not surprised that they’re trying,” Assemblyman Jim Patterson, R-Fresno, said.
Patterson sits on a committee that oversees EDD and has been critical of the department’s handling of fraudulent claims — now estimated to top $11 billion — and the long delays legitimate filers have faced while attempting to certify.
“My hope is that EDD has learned the lesson of the last year and is actually catching them and denying these claims,” he said.
An EDD spokesperson said that while the faxed in claims do not go through the ID.me verification process, they do go through some sort of fraud screening.MORE NEWS: Councilman Bonin Blasts Recall Effort As 'Extravagant Waste Of Taxpayer Money' As Organizers Continue To Criticize
And while it’s hard to tell how much fraud is being perpetrated by the fax scam alone, it has been estimated that as much as 10% of benefits paid out have been fraudulent.