A grand jury indictment unsealed Wednesday charged two Kern County prison inmates and a Los Angeles woman with a scheme to submit more than $1.4 million in fraudulent unemployment insurance claims.
It is estimated that thousands of prison inmates fraudulently claimed billions in unemployment relief from the California Employment Development Department during the peak of the pandemic from March to August 2020.
Acting U.S. Attorney Phillip A. Talbert announced the July 15 indictment charges against Daryol Richmond, 30 and Telvin Breaux, 29, inmates at Kern Valley State Prison and California Correctional Institute, respectively. Holly White, 30, who resides in Los Angeles, was also charged in the scheme and was arrested Wednesday.
The three are charged with conspiracy to commit mail fraud and aggravated identity theft. The actual loss to the EDD and U.S. in this case is more than $270,000, authorities said.
Court documents stated that applications to the EDD falsely stated that the inmates were available to work and that they had worked as clothing merchants, handymen and other jobs, according to the U.S. Attorney’s Office.
The defendants allegedly created fictitious email accounts and addresses in Southern California to create their claims, even paying family members and others up to $1,000 to use their physical addresses.
The investigation was conducted by the FBI and EDD. Assistant U.S. Attorneys Joseph Barton and Melanie Alsworth are prosecuting the case.
Kern County District Attorney Cynthia Zimmer, who has taken on EDD fraud as a cause locally, applauded the case.
“We are very pleased that our criminal justice partner, the United States Attorney’s Office, is also pursuing prosecution against persons who were involved in the biggest taxpayer fraud scheme in California history,” she wrote in a statement.
California Sen. Shannon Grove, R-Bakersfield, introduced a bill aimed at preventing EDD fraud among California inmates by cross-referencing EDD claims with inmate information. She called for its immediate implementation as a safeguard against future fraud.
“The EDD’s tolerance of unemployment insurance fraud is a scandal of historic proportions,” she wrote in a statement. “The Department failed to check UI claims against current inmate rolls which essentially gave criminals an easy outlet to steal billions of dollars from taxpayers.”
A conviction for committing mail fraud carries a sentence of 20 years in prison and a fine up to $250,000. A conviction for aggravated identity theft carries a mandatory two-year consecutive sentence.