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EDD recovers $1.1 billion in unemployment insurance fraud


In another major step toward continuing to investigate fraudsters and recover unemployment insurance funds, the California Employment Development Department (EDD) recently announced it has recovered $1.1 billion in unemployment insurance funds.

The recovered funds were located on approximately 780,000 inactivated benefit cards. Most of the recovered funds will return to the federal government because the fraudulent claims are from the emergency federal Pandemic Unemployment Assistance program, which was the primary target of fraud nationwide.

In July 2021, California hired McGregor Scott as EDD Fraud Special Counsel. Scott aids the state’s work with law enforcement to combat fraud — including supporting state, federal, and local investigations and prosecutions. Working with EDD, he has leveraged his experience to deliver leads and evidence to aid prosecutions and strengthen ongoing investigations.

“We will continue working with law enforcement to put fraudsters behind bars and recover every stolen dollar that we can,” Scott stated.

“Fraudsters and criminal organizations ripped off California, along with every other state, during one of the worst crises in history – we’re taking aggressive action to return that money to the taxpayers,” said Gov. Gavin Newsom.

The billion-dollar recovery furthers the monumental efforts of EDD and the California Governor’s Office of Emergency Services to investigate and prosecute criminals who defrauded federal emergency unemployment benefit programs. Within the past 15 months, 1,525 total investigations were held.

Other actions California has taken to strengthen its fraud fighting include:

•  Stopping over $125 billion in attempted fraud

by deploying a new identity verification

system,, in 2020 and partnering with Thomson Reuters to help detect and prevent UI and PUA fraud.

•  Setting up the 1099-G call center to help

victims of identity theft deal with any tax

related questions—work that answered 24,000

calls. Fraud can be reported by selecting

Form 1099G in Ask EDD or calling

(866) 401-2849.

•  Working with Bank of America to issue

chip-enabled debit cards that enhance

security and to strengthen fraud-prevention


•  Working with the California Office of

Emergency Services Fraud Task Force on over

a thousand active investigations, arrests, and

prosecutions across California.

•  Creating law enforcement investigative guides

and offering technical assistance to law

enforcement partners who are working fraud

investigation cases.

•  Setting up designated regional contacts for

each division of the state and working with

any agency that needs assistance with an

unemployment insurance fraud case.

•  Continuing to issue consumer scam alerts

throughout the pandemic that warn about

cell phone and email phishing schemes

designed to steal personal information.

EDD runs one of the nation’s largest public benefit systems. Over 20 million people filed over 60 million unemployment, disability insurance, and paid family leave claims over the past decade. EDD prepared, printed and mailed 45 million documents to customers through the most recent fiscal quarters. EDD was mailing nearly 600,000 documents a day during the height of the pandemic.