California: Criminal rings loot billions in jobless funds

LOS ANGELES — Sophisticated hackers, identity thieves and overseas criminal rings stole over $11 billion in unemployment benefits from California last year, but the extent of the fraud might grow far larger: billions more in payments are under investigation.

California Labor Secretary Julie Su told reporters in a conference call Monday that of the $114 billion the state paid in unemployment claims, about 10% have been confirmed as fraudulent, or $11.4 billion.

Nearly $20 billion more — another 17% — is considered suspicious, and a large part of that could be found to be fraud, she said.

“There is no sugarcoating the reality,” Su said. “California did not have sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”

Nearly all of the fraudulent claims were made through the federally supported Pandemic Unemployment Assistance program.

Michael R. Blood, The Associated Press