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California Prisoners Ran $1.4 Million COVID-19 Unemployment Benefits Racket

   DailyWire.com
Midsection Of Prisoner With Handcuffs In Prison - stock photo
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Two Californian prisoners were indicted for attempting to steal $1.4 million in unemployment aid.

With the help of a Los Angeles resident, the inmates managed to collect over $270,000 by stealing other prisoners’ identities.

A Department of Justice press release said:

The indictment charges Daryol Richmond, 30; Telvin Breaux, 29; and Holly White, 30, with conspiracy to commit mail fraud and aggravated identity theft. Richmond and Breaux are inmates at the Kern Valley State Prison and California Correctional Institute, respectively. White resides in Los Angeles. The indictment was unsealed today following White’s arrest.

According to court documents, the underlying applications for the claims falsely stated that the inmates worked within the prescribed period as clothing merchants, handymen, and other jobs, and were available to work. To avoid detection, the defendants created fictitious email accounts and used different physical addresses throughout Southern California for the fraudulent claims. In some cases, they paid family members and associates up to $1,000 to use their physical addresses. The actual loss to the EDD and United States is over $270,000.

The $1.9 trillion American Rescue Plan provided for enhanced, $300-per-week federal unemployment insurance. As the United States economy recovered from COVID-19 and the lockdown-induced recession, the unemployment aid distorted labor market recovery as Americans grew reluctant to seek new positions. Thousands of Americans in Republican-led states are currently filing suit against their governors for opting out of the enhanced payments.

Indeed, the Federal Reserve’s semiannual report to Congress named the handouts as a major bottleneck for the United States economy:

With economic activity rebounding, labor demand rose briskly in the spring, while the supply of labor struggled to keep up. Employers reported widespread hiring difficulties, job openings jumped to about 30 percent above the average level for 2019, and the ratio of job openings to job seekers surged… enhanced unemployment benefits have allowed potential workers to be more selective and reduce the intensity of their job search.

The case of the Californian inmates was far from the only instance of unemployment fraud. As Axios revealed in June, as much as half of all unemployment benefits — roughly $400 billion — spent by COVID-19 relief bills may have been lost to scams.

Up to 70% of the money stolen “likely left the country,” flowing to criminal syndicates based in China, Nigeria, Russia, and other hostile nations. The rest was likely “stolen by street gangs domestically, who have made up a greater share of the fraudsters in recent months.”

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