California’s unemployment payment benefits have been approved to release over $140 million to at least 20,000 prisoners, said local and federal prosecutors on Tuesday, which marked a significantly flawed system that included claims made in the name of convicted murderers.

Unemployment benefits

Between March and August, the California Employment Development Department received over 35,000 filed claims were made under the names of inmates. The Sacramento County District Attorney, Anne Marie Schubert, said the state paid for more than 20,000 of the applications. Additionally, at least 158 claims were filed under the name of 133 death-row prisoners, which resulted in the release of more than $420,000 unemployment benefits.

Schubert said, “It involves rapists and child molesters, human traffickers and other violent criminals in our state prisons.” the paid inmates include Scott Peterson, who was placed on death row after prosecutors convicted him of murdering his pregnant wife. However, the California Supreme Court recently overturned the convict’s death sentence and ordered a lower court to reassess his case.

While Schubert confirmed Peterson’s name was used in a claim for unemployment benefits, she declined to provide further information. The convict’s attorney, Pat Harris, said that while his client’s name surfaced during the investigation, no evidence showed that he received the state’s financial support.

Harris said, “This investigation, when it’s completed, will show that he had not a thing to do with any scheme to get fraudulent benefits,”

Schubert listed several other prominent names that received unemployment benefits, including Cary Stayner, who was convicted of four murders in 1999; San Diego woman Susan Eubanks, who shot her four sons in 1997 that resulted in their deaths, and other heinous criminals.

Hidden scheme

Prosecutors revealed that they discovered the scheme after listening to recorded prison phone calls. They said inmates talked about how easy it was to get unemployment benefits despite being in jail. Legal experts said the plot always required outside assistance, whether it be friends or family members, who would be the ones to receive the money.

One address from Kern County, which houses five state prisons, was used to received unemployment benefits for 16 inmates. The Kern County District Attorney, Cynthia Zimmer, said she has never seen such a massive fraud in nearly four decades of service as prosecutor of the state.

Schubert added that some of the applications used the real names of the prisoners, while others used faked identities. They also used fake Social Security numbers, and one claim used the name “poopy britches.” She added that the inmates were mocking the system with their scheme.

San Mateo County has so far charged 22 people, six of whom are not in prison, for the fraudulent claims. Prosecutors said that several other investigations were continuing to determine who was responsible for the deceits, the San Francisco Gate reported.

Prosecutors placed the responsibility on the Employment Development Department for approving the fraudulent claims after being flooded by over 16.4 million benefit claims since the beginning of the coronavirus pandemic. The incident resulted in a backlog that peaked at 1.6 million.

Legal experts said that in an effort to process all backlogged claims, the department did not fully implement its process of checking the applications against the list of prisoners. The San Mateo District Attorney, Stephen Wagstaffe, said that when he told the department that some inmates were unjustly receiving unemployment benefits. However, the agency said it could not freeze the payments until the individuals were charged with a crime.

Nine county district attorneys were forced to send a letter to California Governor Gavin Newsom requesting that he intervene with the issue. The U.S. Attorney for the Eastern District of California, McGregor Scott, said that the problem needed to be acted on and not talked about.