Home>Articles>EDD Suspends 1.4 Million Unemployment Claims Due To $2 billion Fraud Concerns

EDD Suspends 1.4 Million Unemployment Claims Due To $2 billion Fraud Concerns

Affected beneficiaries will need to supply the agency with documents proving their identity

By Evan Symon, January 8, 2021 2:17 am

Multiple reports from the Employment Development Department (EDD) Wednesday found that over 1.4 million unemployment claims in California have been frozen since the New Year due to concerns over fraud.

The EDD has been battling fraudulent cases all year, with California turning down EDD audits several times to help locate fraud in favor of ‘strike teams’ formed by the Governor. While some larger EDD fraud rings, using information from incarcerated people, those in nursing homes, and other citizens largely unable to combat their information being used, were found out in September and October, the EDD did not find the largest source of fraud until December.

That month, the EDD found that $2 billion of the $110 billion given out in the form of benefits from the EDD this year had been fraudulent. Many of the fraudulent claims were especially egregious, such as over 100 claims being sent to the same address or some being in the name of famous people such as Senator Dianne Feinstein (D-CA). Outrage was swift from both lawmakers and taxpayers. Governor Newsom immediately put fraud teams into action, with his approval rating failing to recover from the fallout and helping spur the growth of the recall campaign against him.

With an added emphasis on fraud, the EDD spent the remainder of December locating unemployment benefit cases that were ‘potentially fraudulent’, eventually find around 3.5 million cases that fit that description by late December. Two million of the cases were immediately disqualified, such as those sent to inmates and some registered to deceased people, leaving 1.4 million to be suspended in January while the EDD takes a closer look at them.

The suspension of the accounts led over a million unemployed Californians to learn of the situation in the last week. Many found out from communication with the EDD, being told that “Your claim is suspended because it may be tied to fraudulent activity.” Others received notices in the mail reading “You have been receiving unemployment benefits, but we have temporarily suspended your claim because it may be tied to fraudulent activity. You will receive further instruction from EDD on how to verify your identity beginning Jan. 6, 2021.”

While initially silent, the furor of unemployment beneficiaries, who rely on the money to tide them over during the pandemic while they find another job or wait until their business reopens, led the EDD to make a statement during the weekend, days before the full number of beneficiaries in limbo was known.

“As part of ongoing efforts to fight fraud, EDD has suspended payment on claims considered high risk and is informing those affected that their identity will need to be verified starting this week before payments can resume,” tweeted the EDD. “More details on the EDD website in the days ahead.”

The 1.4 million claimants will now have to prove their identities with additional documentation or by other means with the EDD to continue receiving unemployment benefits.

Outrage over the suspension of benefits

Many taxpayer groups and lawmakers from both sides of the aisle have come out against the decision to shut off benefits to this many people at once, noting that, due to high unemployment and the pandemic, the benefits are needed now more than ever.

“You know, the EDD was so swamped earlier this year that they gave quick yeses without looking deeper into each of the claims and checking them against others and if the person listed really was open to getting them,” said Linda Ballard, a Los Angeles-based accountant who works closely with COVID-19 economically affected people, in a Globe interview. “We’re now paying the price for that. First it was billions in fraud, and now we are holding back money for hundreds of thousands of people who paid into the system.

Scott Wiener
Senator Scott Wiener. (Photo: Kevin Sanders for California Globe)

“I have a few clients that this happened to, and they’re all very scared of what will happen in the coming weeks if they aren’t restored. Not months. Weeks. This isn’t ‘oh no, I won’t be able to afford Netflix’ money either. This is ‘oh no, I may not afford food this week money’. Many have dropped services, including me  as their accountant, because they’re finding everything possible to cut if they don’t get those benefits back. In some cases, California is now failing people it had failed before by locking down their business or place of work. It’s a mess.”

Lawmakers also noted concern over holding back the 1.4 million people from benefits.

“It’s very frustrating that EDD did this and we still haven’t heard back three or four days later,” said  Senator Scott Wiener (D-San Francisco) on Wednesday. “I get that there’s a fraud problem. But when you have people who have been receiving benefits for a number of months, you don’t just shut off their benefits. If EDD needs additional evidence that someone is who they say there are, then ask for that information and give them a deadline before they shut it off.”

The EDD is expected to send additional instructions and update the public as to developments on the situation during the next week.

Evan Symon
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9 thoughts on “EDD Suspends 1.4 Million Unemployment Claims Due To $2 billion Fraud Concerns

  1. Yea my EDD payments were shut off for no reason other than suspicious fraud. I guarantee you this is totally random. Another distastor caused by Governor Gavin Newsom. My account dose not hit any of the possible fraud or have any red flags. 22 days and no response to my emails. Three generations out of work because of Gavin’s ridicules shut down of healthy people. Im unemployed since March, Daughter unemployed & Granddaughter also layed off. sending billions dollars of EDD payments to prisoners in California and out side the state of California. I just want to go back work as of millions of other citizens. This is a crime against humanity. Here is what my online account says.
    Page Not Found
    The page you requested cannot be found. If your link was once valid, the information you are looking for has most likely moved.
    Benefit Programs Online
    My account was opened March 2020 cause of Covid19 Now its gone

    1. My edd account says the same thing to me when I get my password or username wrong. I recommend resetting your password just in case it could simply be that.
      I do not know if this info will help you, but it is worth a try.

  2. Having already exposed the EDD and DMV as completely out of control years ago, why wasn’t anything done? Answer, someone with connections would have to take responsibility, and we can’t have that, as it would expose just how screwed up the state is.

  3. After months of getting ui benefits my account was flagged as fraud with no evidence of such. Can’t pay the rent or bills. Will be homeless in 2 weeks. How is this going to stop to spread of Covid 19 only make matters worse because people can not do there jobs right. These people need to be put in Prison for life for putting millions and the millions that could become infected by there decision at risk. This is a massive murder plot. The biggest plot ever in world history because of the failure of a few

  4. This state is the home of Silicon Valley and IT innovation and they can’t figure out their way out of a paper sack….


    This latest Presidential election cycle has proven how utterly CORRUPT, DUPLUCITOUS and incompetent they are…

    Time for a state revolution, people…

  5. Sounds like the EDD rolls got mixed up with the voter rolls, LOL. So our state has lost another 2 billion added to the PPE money that went to China. Nice. My debit account with Bank of America was cleaned out by someone in NY so they halted my account. They sent me a new card that they would not activate because EDD put the account on hold. EDD asked me to upload my license and utility bill which I did and got a confirmation of. A week later they sent me a letter which contained my entire SSN asking me again to send the license and utility bill. I sent it to make sure they got it. A week later they sent another letter with my SSN on it again asking the same thing. Now I wait. Bank of America is complicit in this mess. EDD needs to stop using them and send out checks instead. The people need to get a PO box to get the checks. Because on top of this mess our mailboxes are being robbed also.! TOTAL INCOMPETENCE

  6. Up date Tuesday the 12th of I have sent two emails, you can’t get a hold of EDD, by phone.No response other than they received email, Government is so messed up what a waste. If they flagged me there should be a reason however there is no reason, so what info will they ask for and when, forced locked down , lost my job now it’s been3 weeks and nothing recall Gavin

  7. EDD is just as messed up as Sacramento, run by the same idiots. 1.4M EDD accounts affected. My son got a message to verify with Id.me, he’s been trying for 5 days now. Website says can’t verify his identity bcs his cell phone is not in his name so he uploaded his DL and two other accepted documents, told to do a video call to verify, each time it says the wait is 5+ hours. Today he waited all day then when the wait time hit 1 hour 29 minutes it started to increase and in 20 minutes it was back to 5+ hours wait time. This is inexcusable and f$!#÷= up. Maybe there needs to be a class action against EDD and I’d.me from the 1.4M people they are screwing over and denying payment to. Where is the proof of fraudulent activity on these accounts?

    1. Don, reading your post I felt like I was writing my complaint all over again. I have been doing the verify ID me also for the past 5 days. The part that does not make any sense is just two weeks ago I did a verify with doc u sign from the EDD and everything was fine, it was approved. After it was approved I thought finally my pending in box message will turn into paid. WRONG, WRONG, WRONG, . The when you do get through to EDD, the operator tells me that the ID me verification is a third party company that EDD has hired. If the ID me company can distinguish that the selfie I took and my drivers license picture are not the same people, mind you this is after I sent about 50 selfies, that is no exageration. Then the EDD needs to hire a different ID me company. The EDD is making us wait intentionally, for as long as it takes to fix their mistake of distributing to much money. You and I are not the ones filling out claims from people in prison, you and I are not the ones fileing claims from people who are deceased. People we have got to take action, how I don’t know, if you have a plan Im IN!!!!

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