EDD Actively Prosecutes Fraud
The Employment Development Department (EDD) administers the Unemployment Insurance (UI), Disability Insurance (DI), the Paid Family Leave (PFL) program, and Employment Tax programs for the State of California. To support these programs and the payment of benefits, the EDD is responsible for collecting the associated employment payroll taxes.
At the EDD, we are dedicated to detecting, deterring, and preventing any occurrence of fraud in these programs. We use a variety of electronic monitoring, data-matching, and cutting edge technology measures to detect fraudulent activity. Cases involving the fraudulent receipt of benefit payments or evasion of payroll tax reporting obligations are actively pursued and those responsible are prosecuted to the fullest extent of the law.
The EDD provides fraud deterrence outreach and education to assist claimants, employers, and their representatives so they can be fully aware of the serious consequences of committing fraud.
Recent Fraud Convictions
Here are current year fraud convictions detected by the EDD and prosecuted to the fullest extent of the law.
- County: San Bernardino
- Court Case Number: 16CR-039096
- Amount Due to the EDD: $28,652
- Claimant: Desiree Bejarano
- Conviction: The claimant pleaded guilty to felony violation of section 2101(a) of the Unemployment Insurance Code.
- Sentencing: The claimant was ordered to pay full restitution to the EDD. Sentencing was continued to a future date. If she pays a minimum of $10,000, the felony will be reduced to a misdemeanor.
- Summary of Incident: The claimant submitted forged medical documents and failed to report her work and earnings while collecting Disability Insurance benefits.
- County: Los Angeles
- Court Case Number: BA450597
- Amount Due to the EDD: $29,632
- Claimant: Jose Valencia
- Conviction: The claimant pleaded no contest to felony violation of section 487 of the Penal Code.
- Sentence: Sentencing scheduled later in 2018
- Summary of Incident: The claimant failed to report his work and earnings while collecting Disability Insurance benefits.
- County: Contra Costa
- Court Case Number:05-161273-8
- Amount Due to the EDD: $14,866 for tax liability and $4,950 for an Unemployment Insurance overpayment.
- Employer: Damon Ashton Braithwaite DBA Canna Café, Inc.
- Conviction: On 11/29/17, the employer pleaded no contest to misdemeanor violations of section 487(a) of the Penal Code, section 2117.5 of the Unemployment Insurance Code, section 7153 of the Revenue and Taxation Code, and section 3700.5 of the Labor Code.
- Sentencing: On 01/25/18, the employer was convicted of one misdemeanor count each to the violations charged and was ordered to serve 180 days in county jail, to serve three years of probation, and to pay $19,816 in restitution to the EDD.
- Summary of Incident: The initial allegation was received from the Contra Costa County District Attorney’s Office advising the employer was not reporting employees to the EDD and was engaging in Unemployment Insurance benefit fraud. The investigation revealed the employer was not registered and failed to report $174,979 in wages to the EDD from January 2014 through December 2014. The investigation also determined the employer failed to report his own wages to the EDD while receiving Unemployment Insurance benefits, resulting in an overpayment of $4,950.
- County: Tehama County
- Court Case Number: NCR95442
- Amount Due to the EDD: $81,378
- Employer: Isabel Escareno DBA Escareno Reforestation
- Conviction: On 12/07/16, the employer pleaded no contest to felony counts of section 11880(a) of the Insurance Code and section 2101.5 of the Unemployment Insurance Code.
- Sentence: On 01/22/18, the employer was sentenced to one year in county jail and five years of formal probation. She was ordered to pay $81,378 in restitution to the EDD.
- Summary of Incident: This was a joint investigation between the EDD, State Compensation Insurance Fund (SCIF) and the Tehama County District Attorney’s Office with assistance from the California Department of Insurance. The initial allegation was received from the Tehama County District Attorney’s Office. The employer was paying employees and withholding payroll taxes but did not report the wages or pay the taxes to the EDD nor the required premium to the SCIF for the period June 2012 through June 2013.
- County: San Mateo
- Court Case Number: 15NF002012A
- Amount Due to the EDD: $91,787
- Employer: Laura Nobis DBA Nobis Care Home
- Conviction: On 11/30/17, the employer pleaded no contest to two felony counts of section 2118.5 of the Unemployment Insurance Code and one felony count of section 11760(a) of the Insurance Code.
- Sentence: On 01/22/18, the employer was sentenced to one day in county jail with credit for time served, and three years of formal probation. The employer has paid full restitution of $91,787 to the EDD.
- Summary of Incident: The initial allegation from workers’ compensation insurance carrier, Berkshire Hathaway Homestate Companies, indicated that 12 to 14 employees were working for the employer while the employer reported only three employees to the EDD. Investigation revealed the employer failed to report payroll in cash for the time period of October 2006 through December 2013. An EDD audit uncovered $997,184 in wages that were not reported for that period.
- County: Superior Court, Los Angeles
- Court Case Number: to be determined
- Amount Due to the EDD: to be determined
- Employer: Jeong Kim DBA Fashion Q
- Conviction: On 06/22/17, the employer pleaded guilty to felony violations of sections 7152(a)/7153.5) and 19705(a)(1) of the Revenue and Taxation Code, section 2118.5 of the Unemployment Insurance Code), section 11760(a) of Insurance Code, and section 186.11(a)(2) Special Allegation White Collar Crime Enhancement of the Penal Code.
- Sentence: The employer was sentenced to two years in prison for sales tax evasion, false income tax returns, failure to pay taxes and workers’ compensation fraud.
- Summary of Incident: The employer owns more than fifty retail clothing stores in Los Angeles, Orange, San Diego, San Bernardino and Ventura counties. From 2010 through 2016, the employer failed to report taxable sales to the Department of Tax and Fee Administration (formerly Board of Equalization) and failed to report income to the Franchise Tax Board, and wages to the EDD. The employer also failed to report wages to his insurance carriers to evade payments for workers’ compensation insurance. The California Attorney General’s Office prosecuted the case in coordination with the TRaCE taskforce including the California Department of Justice, California Department of Tax and Fee Administration, Department of Insurance, the Franchise Tax Board, and the EDD.
- Media Release: https://oag.ca.gov/news/press-releases/attorney-general-becerra-retailer-sentenced-prison-56-million-fraud-scheme
- County: Santa Clara
- Court Case Number: C1635072
- Amount Due to the EDD: $293,796
- Employer: Aaron Ramos DBA Supreme Services Inc.
- Conviction: On 11/29/17, the employer pleaded no contest to violations of sections 32 (felony) and 484 (misdemeanor) of the Penal Code.
- Sentence: On 01/12/18, the employer was sentenced to three years of formal probation, 30 days in jail, and was ordered to pay restitution.
- Summary of Incident: The State Compensation Insurance Fund and the EDD conducted an audit on the employer. The EDD audit found the employer had underreported wages of approximately $544,988 in wages for the period of June 2012 through June 2013.
- County: Sacramento – Federal Court Eastern District
- Court Case Number: 2:17-CR-0600MCE
- Amount Due to the EDD: Amount to be determined for this claimant who was indicted with five others.
- Claimant: Brittany Maunakea
- Conviction: The claimant pleaded guilty to one count of section 1349 Title 18 of the United States Code.
- Sentence: Sentence is scheduled for a later date.
- Summary of Incident: The suspect participated with co-conspirators to use over 250 stolen identities to file 190 Unemployment Insurance claims. Fictitious businesses were created to facilitate the fraud. Approximately $800,000 in UI benefits were paid as a result of the scheme.