LAST SUMMER WAS ACTUALLY MADE EASIER BY EDD MANAGERS. IT IS THE SECOND AUDIT THIS WEEK OF EDD AND THIS ONE POINTS TO EVEN MORE SEVERE PROBLEMS INSIDE THE DEPARTMENT. THE AUDIT FOUND THERE IS NO DEDICATED FRAUD DIVISION. IT IS A QUAGMIRE OF DIFFERENT UNITS THAT AR SUPPOSED TO COORDINATE. ONE HAS THE ABILITY TO IDENTIFY A POTENTIAL PROBLEM BUT NOT TO STOP THE PAYMENT. KCRA3 FIRST REPORTED THE STACKS OF FRAUDULENT ENVELOPES. AND YET, EDD CONTINUE TO MAKE PAYMENTS INTO DECEMBER OF LAST YEAR. THIS BECAUSE A FRAUD PREVENTION SAFEGUARD HAD BEEN REMOVED BY MANAGEMENT TO SPEED UP PROCESSING. THAT WAS A DECISION THAT WAS NOT REALLY UNDERSTOOD — WHERE THEY DID NOT UNDERSTAND HOW THE I.T. SYSTEM WORK EVERY THE LABOR SECRETARY PU THE BLAME ON THE PANDEMIC ASSISTANCE PROGRAM. BUT THE DEPARTMENT OF LABOR WARNED UNEMPLOYMENT DEPARTMENTS ABOUT FRAUD PREVENTION TWICE, AND NOT ALL OF THE FRAUD WAS UNDER THIS LABEL. THEY GOT WARNINGS ABOUT THE POTENTIAL FOR FRAUD. EVEN WHEN THEY DID BEGIN TO ACT, FREEZING HUNDREDS OF DEBIT CARDS, THERE WAS NO PLAN TO ASSIST PEOPLE WITH LEGITIMATE ACCOUNTS. THEN, DIRECTOR HILLIAR SAID IT WAS BANK OF AMERICA WHICH HANDLES THE DEBIT CARDS. A COURT TO THE AUDITS, THAT WAS A LIE — ACCORDING TO THE AUDITS, THAT WAS A LIE. ONE THAT IS ANGRY LEGISLATORS. WE KNOW WHEN EDD DIRECTED THINK OF AMERICA TO FREEZE ACCOUNTS, THEY DID NOT HAVE A PLAN TO UNFREEZE THE ACCOUNTS OF LEGITIMATE, HONEST CALIFORNIANS AWAITING CHECKS. INCREDIBLY UPSETTING. EDD HAS VERIFIED THEY PAID OUT $11 BILLION IN FRAUD. A NUMBER THEIR OWN RECORDS SHOW IS LIKELY TO CLIMB AS HIGH AS $30 BILLION. IN SACRAMENTO, BRITTANY JOHNSON. HOWLE’S AUDIT SAYS THE EDD NEEDS TO ESTABLISH A CENTRAL FRAUD UNIT BY MA
Second EDD audit details mismanagement, lies, billions in fraud
New audit outlines stunning missteps and weaknesses that allowed unemployment fraud
Updated: 5:25 PM PST Jan 28, 2021
Thursday marked the release of the second audit in as many days of the California Employment Development Department, or EDD. The first detailed mismanagement and a lack of preparedness for economic downturns inside EDD. This new one says that lack of preparation allowed billions in fraud to get paid out by the state’s unemployment department.KCRA 3 Investigates first profiled the fraud in the summer of last year. Dozens, hundreds, sometimes thousands of envelopes began arriving, all at once, in California mailboxes. All of those letters had legitimate names, but the identities were stolen and used to collect unemployment through the EDD.State Auditor Elaine Howle’s latest audit says that from April to August of 2020, the EDD made payments to claimants despite concerns about the legitimacy of…
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