California officials blasted the Trump administration’s plans to launch a full-sale investigation into unemployment fraud as ”purely political” — and blamed lost money on the feds.
The US Department of Labor intends to send a “strike team” to dig into COVID-19 pandemic-era fraud involving California’s Employment Development Department, The Post exclusively reported Wednesday.
Labor Secretary Lori Chavez-DeRemer said the Biden administration “turned a blind eye” to stolen money and vowed to fully examine the scope of theft that occurred during COVID-19 in California. MediaPunch / BACKGRIDCalifornia is believed to have lost as much as tens of billions of dollars in fraudulent unemployment payouts.
Labor Secretary Lori Chavez-DeRemer said the Biden administration “turned a blind eye” to stolen money and vowed to fully examine the scope of theft that occurred early in the pandemic.
“This ends now,” Chavez-DeRemer said.
EDD officials told The Post they have already taken numerous efforts to combat fraud, launching more than 2,300 investigations and securing 670 convictions with the help of Fraud Special Counsel McGregor Scott, a former US attorney.
“The Trump administration’s announcement today is purely political,” an EDD spokesperson told The Post by email.
“The fraud referenced is the result of a program poorly designed by the federal government, which created fraud at a nationwide scale.”
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The Department of Labor did not respond to requests for comment on California’s stance on the pending probe.
EDD officials said the National Association of State Workforce Agencies and the National Governors Association both warned that unemployment benefits programs were “hurriedly deployed” with no anti-fraud guidance, collaboration or technical assistance from the federal government.
“This left states to fend for themselves against international criminal organizations,” a spokesperson said.
“The issues from the pandemic are long over as the nationwide fraud against the federal Pandemic Unemployment Assistance program ended years ago. It occurred because the federal program lacked the safeguards of traditional state unemployment insurance.”
California officials, including Gov. Gavin Newsom, have blamed widespread fraud in the state on the feds. APThe feds intend to send investigators from the national and regional office to root out more instances of fraud similar to work being done in Minnesota, where officials believe up to $9 billion was stolen.
California received nearly $290 billion in relief funds during the pandemic, and EDD was among the largest recipients.
State officials noted that its improper payment rate of 12.06% is slightly lower than the national average of roughly 14%.
“We have many tools to prevent fraud, and hope the federal government continues to back our aggressive fraud-fighting resources,” an EDD spokesperson said. “We appreciate any support and cooperation in keeping the fraud door shut.”
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