Former CA EDD employee gets 63 months in prison for fraud
A former Department of Employment Development employee was sentenced Friday to 63 months in federal prison for her involvement in a fraudulent $4.3 million unemployment benefits scheme.
U.S. District Court Judge John Holcomb convicted Gabriela Llerenas, also known as Maria G. Sandoval, 44, of Perris, and ordered her to return the money.
EDD has been riddled with fraudulent claims, and it’s estimated that up to $20 billion could be lost in federal funds used to pay unemployment benefits.
EDD administers the state unemployment program. The U.S. Attorney’s Office for the Central District of California said Friday that Llerenas “took advantage of the expanded eligibility for unemployment insurance benefits” made possible by the CARES Act of 2020.
Federal law, a massive emergency relief program to quickly help people who have suddenly found themselves unemployed due to the COVID-19 pandemic, created the Pandemic Unemployment Assistance Program.
The federally funded program provided benefits to about 2.9 million Californians who traditionally would not have been eligible for regular unemployment insurance, such as independent contractors and small business owners. It ended in September.
But the program has become a target of scams. The same kind of checks and balances in regular government programs provided by employer-reported wage data lacked, and officials were determined to get the money out quickly in a rapidly deteriorating economy.
From April to October 2020, Llerenas “filed and caused the filing with the EDD of fraudulent unemployment insurance benefits that falsely claimed that the named claimants were independent independent contractors – often identifying them as cake decorators or event attendants – who have been negatively affected by the COVID -19 pandemic,” the U.S. Attorney’s Office said.
It describes how Llerenas obtained some of the names, social security numbers and other identifying information she used to submit the fraudulent claims through her previous tax preparation work.
Llerenas also incorrectly stated on some of the claims that the plaintiffs were California residents who could get EDD-administered unemployment insurance benefits while living elsewhere, the U.S. attorney’s office said.
He said that on some claims, she “inflated the income amounts she reported for the claimant to maximize the benefit amount. She also filed a dozen or more fraudulent EDD claims in one day.
Because of its business, EDD has authorized Bank of America to send debit cards in the name of applicants to addresses it has provided. Cards were mailed to her residence, her husband’s workplace, her mother’s apartment and the addresses of friends and other family members, the US attorney’s office said.
He found that Llerenas charged named claimants a fee to complete claims, often paid from fraudulently obtained benefits.
“In at least one instance, she told the named plaintiff that she was still employed at EDD and could control the distribution of unemployment insurance benefits, then demanded additional payment to ‘release’ the benefits,” said the US Attorney’s office. .
He reported that as part of the investigation, $621,124 in cash was seized in Llerenas and was confiscated.
Llerenas had worked at EDD as a disability insurance program representative. She resigned in March 2002 after admitting to fraudulently authorizing and paying for disability benefits administered by EDD. She was sentenced to 37 months in federal prison in connection with this scheme.
Allegations of widespread fraud are being investigated by several government agencies. The Department of Labor-Office of Inspector General, EDD-Investigations Division, Homeland Security Investigations, United States Postal Inspection Service, FBI, and Social Security Administration-Office of Inspector General investigated on this case. Assistant United States Attorney Ranee A. Katzenstein, Chief of the Major Fraud Section, was the prosecutor.
In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize Department of Justice resources in partnership with agencies across government to intensify enforcement efforts. and prevention of pandemic-related fraud.
This story was originally published February 5, 2022 8:58 a.m.