A former California Employment Growth Division worker admitted this week in federal courtroom to fraudulently acquiring greater than $768,000 in COVID-19 unemployment funds for useless individuals and unsuspecting, ineligible claimants.
Phyllis Hope Stitt, 61, of Carson pleaded responsible Wednesday, Jan. 8, to at least one depend of conspiracy to commit mail fraud and financial institution fraud for submitting no less than 29 phony unemployment insurance coverage claims. Stitt’s former boyfriend — Kenneth Earl Riley, 64, of South Los Angeles — pleaded responsible to the identical cost.
Stitt and Riley face a most of 30 years in jail when they’re sentenced on Might 9.
In accordance with a plea settlement with federal prosecutors, the pair carried out the fraud from March 2020 to September 2021 whereas Stitt was employed by the EDD, the place her job duties included figuring out claimant eligibility for unemployment advantages and processing claims.
The conspiracy concerned no less than 10 victims who didn’t authorize the submitting of unemployment claims on their behalf.
Stitt acquired the names, dates of start, Social Safety numbers and different figuring out info of people making use of for unemployment advantages. She then filed fraudulent EDD purposes for unemployment and COVID-19 advantages for people who have been ineligible as a result of they have been employed, not unemployed because of the pandemic or have been deceased, the plea settlement states.
As a way to have EDD approve the fraudulent purposes, Stitt submitted false info indicating claimants had labored in California, had turn into unemployed because of the pandemic and have been entitled to advantages. She additionally supplied the EDD with phony employment histories and driver’s license info for the claimants.
Stitt backdated the unemployment claims to maximise advantages and gained management of funds by together with on the fraudulent purposes return mailing addresses that Riley might entry.
Debit playing cards and accounts created because of the fraudulent purposes have been utilized by Riley and others to make ATM money withdrawals in Los Angeles and San Bernardino counties, in addition to financial institution transfers and retail purchases, the plea settlement states.
The California State Auditor famous in a 2021 report that the EDD’s failure to bolster its fraud detection efforts till months into the pandemic resulted in no less than $10.4 billion paid out for claims that could be fraudulent.
Whilst late as December 2020, practically a 12 months after the primary COVID-19 case was reported within the U.S., EDD was permitting claimants to proceed to gather advantages utilizing suspicious addresses as a result of it didn’t set up fee blocks for his or her claims, the report states.
Moreover, $1 billion of the $10.4 billion paid for suspicious claims was the results of EDD’s determination to take away a key safeguard towards fee to claimants whose identities it had not confirmed.
In a single occasion, Edward Kim of Los Angeles allegedly submitted no less than 400 fraudulent pandemic claims with the EDD, based on an arrest affidavit filed by the U.S. Division of Labor. No less than 120 of these claims have been filed underneath the names of inmates incarcerated in California prisons, authorities mentioned.
The EDD mentioned it has since obtained restitution orders stemming from prison convictions for practically $20 million in pandemic-related fraud.
The case towards Stitt and Riley was investigated by the U.S. Division of Labor’s Workplace of Inspector Normal, the FBI and the Investigation Division of the California Employment Growth Division. It was prosecuted by the U.S. Legal professional’s Workplace.
Initially Revealed: January 10, 2025 at 7:22 AM PST
