The San Mateo County district attorney’s office opened the new year prosecuting a fraud case involving prison inmates who allegedly filed unemployment claims with the state’s Employment Development Division. Prosecutors say the case currently includes 21 individuals who conspired to receive about $250,000 in pandemic unemployment benefits.
In what prosecutors say was the first known instance of EDD fraud by inmates in the state, the San Mateo County case helped to expose a state agency that was unprepared to handle a surge of unemployment claims and filter out the illegitimate ones.
Between March 23 and August 7, 11 inmates at the San Mateo County jail — Emon Brown, Marcel Chapman, Taisia Fauolo, Jose Garcia Barron, Mike Kamko, Luis Mariscal, Rommel Narvaez, Quincy Norton, Freeman Owens, Reginald Sinegal and Edgar Vasquez — and one inmate in San Francisco County jail, Khejon Nelson, allegedly unlawfully communicated with California state prison inmates Lionel McCoy and Joseph Smith as part of the fraud. The district attorney report also implicated six people out of custody for unrelated crimes. They are Jasonna Auzenne, Tony Covington, Zachary Lewis, Ronnelle Narvaez, Miani Pon and Shamesha Reese.
The case in San Mateo County was discovered serendipitously by an investigator, Jordan Boyd, who had been listening to a conversation between an inmate and a visitor for a separate case. In the process, Boyd heard them discussing a “scam,” according to District Attorney Stephen Wagstaffe.
“We then notified the state prisons and county jails and we said, ‘Hey, watch out for this scam,’” he said. “And poor EDD, they were suddenly inundated.”
District attorneys elsewhere in California have reported being overwhelmed by the number of EDD fraud cases on their docket. Wagstaffe joined his counterparts in asking Gov. Gavin Newsom for additional resources for the offices to prosecute the cases. Though Wagstaffe supported the request, he said his office has been handling the local incident and is satisfied with the pace at which it is moving through the courts.
Bank of America, which works with the EDD to issue and manage prepaid cards to unemployment benefit assistance, placed the estimated loss due to fraud across the state at $2 billion. In many of these cases, applications were linked to people outside of California. And many claims used the same mailing, phone number or email address.
So far eight people have been convicted of fraud or conspiracy to commit fraud. The rest have yet to enter a plea deal. Following another COVID-19 order, all jury trials have been postponed to February.
Penalties for the convicted range between $24,000 to $42,000 in restitution. “That’s what we believe they got and spent (in pandemic unemployment relief),” Wagstaffe said. They also face up to three-year maximum prison sentences, with the exception of those with a bad record who may face an additional two or three years.
He said how much the courts will be able to recover in restitution will vary.
“If you’ve got somebody who’s been doing this and really lives on the edge, it’s going to be hard to get much. And generally, I think that’s what all of these are,” he said.