Federal prosecutors have charged three women — a former state labor agency worker, a prison inmate, and a parolee — in a scheme to defraud California’s scandal-scarred unemployment insurance system, investigators announced Thursday.
A Roseville woman who is a former employee of the state Employment Development Department, a female inmate at a state women’s prison, and a woman who is a parolee have been charged with multiple fraud schemes linked to unemployment benefits in California, government attorneys said.
The charges, according to the U.S. Attorney’s Office in Sacramento, were filed against:
— Andrea M. Gervais, 43, of Roseville. The former EDD worker, who was fired, filed an estimated 100 fraudulent claims. In at least one instance, Gervais filed a claim using the identity of U.S. Senator Dianne Feinstein, a California Democrat.
— Sholanda Thomas, 36, an inmate at Central California Women’s Facility in Chowchilla.
— Christina Smith, 37, a state parolee.
Thomas and Smith were accused of filing false unemployment benefits claims under the guise of being “hairstylists” and “barbers,” according to the charges.
“This theft of taxpayer dollars intended to assist our citizens in a very difficult economic time simply will not be tolerated,” U.S. Attorney McGregor Scott said.
Amid coronavirus-linked business shutdowns ordered by state and local government officials to combat the deadly bug, a record number of California workers have lost their jobs and been forced to file for unemployment benefits.
To make matters worse for the disgraced EDD, the state agency is wrestling with a mammoth backlog of unpaid unemployment claims.
The EDD’s broken call center and glitch-hobbled webpage have snarled the agency’s efforts to pay legitimate claims filed by California workers who have lost their jobs.
But along with the sky-high numbers of jobless claims, investigators have uncovered a widening array of fraud schemes.
State Assemblymember Jim Patterson, a Republic whose district includes parts of Fresno County and Tulare County, said the fraud woes are just the latest example of blunders at the EDD.
Patterson said he was stunned to learn that Sen. Feinstein’s identity was used for at least one of the bogus payments.
“EDD is complicit in the fraud by mailing out Social Security numbers to scammers, or they are utterly incompetent by not even checking eligibility before they issue the debit card,” Patterson said. “Either way, EDD has aided and abetted the fraud.”
In the most recent cases, $200,000 was paid out to the Roseville residence of Gervais in the form of Bank of America debit cards. The total value of the fraudulent claims issued from her address was $2 million.
In the case of the prison-based fraud that investigators claim they uncovered, the EDD and federal taxpayers suffered a loss that topped $200,000, according to the U.S. Attorney’s Office.
According to investigators, Smith kept Thomas’ share of the stolen claims payments in a shoebox pending Thomas’ release from prison.
Smith used a portion of her share to obtain plastic surgery, federal prosecutors said.
“Unemployment benefits are intended to support individuals and families who are in crisis due to the economic impact of the COVID-19 pandemic, not be illegally diverted by fraudsters who surreptitiously steal the identities of the unsuspecting,” said Sean Ragan, special agent in charge of the FBI’s Sacramento Field Office.
