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Employment Development Department
Employment Development Department

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.

For more information on what constitutes fraud and reporting fraud, visit Fraud and Penalties: What You Need to Know or Ask EDD: Report Fraud.

Recent Fraud Convictions

Previous Fraud Convictions: 2016 | 2015

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Here are some recent fraud convictions detected by the EDD and prosecuted to the fullest extent of the law.

October 2017

10/23/17: Claimant Sentenced for Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA411107
  • Amount Due to the EDD: $20,000
  • Claimant: Luisa Walker
  • Conviction: On 01/07/14, Walker pleaded guilty to felony Section 550(B) of the Penal Code.
  • Sentence:  On 10/23/17, the claimant was sentenced to 36 months of summary probation. Based upon her completion of 200 hours of community service and repayment of the full restitution at sentencing, the claimant’s conviction was reduced from a felony to a misdemeanor.
  • Summary of Incident: The defendant failed to report her work and earnings while claiming Disability Insurance benefits.
10/19/17: Employer Sentenced to Jail and Will Be Ordered To Pay Restitution for Employer Tax Evasion and Insurance Fraud
  • County: San Mateo
  • Court Case Number: SC084100A
  • Amount Due to the EDD: $41,187
  • Employer: Cynthia Ann Smith DBA Cindy’s Flowers & Gifts
  • Conviction: On 08/03/17, the employer pleaded no contest to one felony count of Section 2118.5 of the California Unemployment Insurance Code and one felony count of Section 11760(a) of the Insurance Code.
  • Sentencing: The employer was sentenced to 90 days in county jail and five years of formal probation. A hearing to determine the amount of restitution owed to the victims is scheduled for a later date. The charges and terms of probation may be amended if restitution is paid in full.
  • Summary of Incident: The San Mateo County District Attorney’s Office received allegations indicating the employer was paying employees in cash and also failing to pay employees. Investigation revealed the employer failed to report employees and their wages to the EDD and knowingly misrepresented the number of employees and/or their wages to their insurance carrier in order to obtain a lower premium for workers’ compensation insurance. After the initial charges were filed, further investigation revealed the employer used someone else’s identity to fraudulently secure a business line of credit accruing over $60,000 in uncollected debt and failed to pay compensation to another individual for services rendered to the business. An EDD audit uncovered $467,909 in wages that were not reported to the EDD from January 1, 2009 through December 31, 2012.
10/02/17: Husband and Wife Claimants Convicted of Mail Fraud to Collect Unemployment Insurance Benefits
  • County: Fresno County, Federal Eastern District Court, Delano,
  • Court Case Number: 1:15 cr 00051 LJO SKO
  • Amount Due to the EDD: $1,800,000
  • Claimants: Raul Oropeza Lopez and Ana Maria Oropeza,
  • Conviction: On 10/2/17, Raul Ororpeza each pleaded guilty to Section 1341, Title 18, United States Code
  • Sentence: Sentence is scheduled for a future date
  • Summary: The claimants obtained personal identifying information of U.S. citizens or legal residents and fraudulently used such information to provide undocumented workers with false identities required to work in the United States as farm laborers.  The claimants then filed fraudulent Unemployment Insurance claims in the names of the assumed identities to later claim benefits for the claimants. Lopez and his wife collected at least $1.3 million from over 520 fraudulent Unemployment Insurance claims filed over six years based on the fraudulent wages allegedly paid to over 70 individuals.
  • Media Release: The U.S. Attorney’s Office, Eastern District of California issued a press release describing the conviction https://www.justice.gov/usao-edca/pr/two-delano-residents-plead-guilty-unemployment-insurance-scheme

September 2017

09/29/17: Employer Convicted for Felony Employer Tax Evasion
  • County: Santa Clara
  • Court Case Number:  C1507976
  • Amount Due to the EDD: $161,038
  • Employer: Rick Rebozzi DBA Rebozzi Inc.
  • Conviction: The employer pleaded no contest to one felony count of Section 2118.5 of the California Unemployment Insurance Code and one felony count of Section 550(b)(3) of the Penal Code. Sentencing has not been scheduled pending a restitution status review.
  • Summary of Incident: The initial allegation, received from the Santa Clara County District Attorney’s Office, indicated the construction company employer underreported wages or failed to report his employees and their wages to the EDD. An EDD audit uncovered $2,803,966 in wages that were not reported to the EDD from 01/01/11 through 09/30/14.
09/29/2017: Claimant Convicted and Sentenced for Conspiracy to Commit Unemployment Insurance Fraud
  • County: Sacramento
  • Court Case Numbers: 2:15cr133 and cr00133GEB
  • Supervised Release: 36 months
  • Amount Due to the EDD:  $3.480,499
  • Claimant: Kyn Naope (co-conspirator)
  • Conviction:  On 3/31/17 the claimant pleaded guilty to violation of Section 371, Title 18 of the United States Code.
  • Sentence: The claimant was sentenced to 60 months in prison including 36 months of supervised release, and ordered to pay $3,480.499 restitution.
  • Summary of Incident: Kyn Naope and others were involved in a scheme to defraud the EDD. The scheme was accomplished by registering fictitious employers and taking the personal information from others to register them as employees in order to file UI claims. The checks were mailed to addresses controlled by the claimant. The scheme resulted in over 450 UI claims filed and approximately $4.5 million dollars in benefits paid. This case was a collaboration between the EDD and the U.S DOL-OIG.
  • Media Releases: Details of the conviction were described in press and media releases from the United States Attorney’s Office, Eastern District, and the Central Valley Business Times.
    https://www.justice.gov/usao-edca/pr/guilty-plea-scheme-defraud-state-california-25-million
    http://www.centralvalleybusinesstimes.com/stories/001/?ID=32372
09/18/17: Claimant Jailed for Unemployment and Workers Compensation Insurance Fraud
  • County: Riverside
  • Court Case Number: RIF1702098
  • Amount Due to the EDD: $2,412 
  • Claimant: Miriam Soriano
  • Conviction:  The claimant was convicted of felony violations including Section 2101(a) of the California Unemployment Insurance Code, Section 1871.4(a)(2) of the Insurance Code, and Section 118(a) of the Penal Code.
  • Sentence: The claimant was sentenced to 36 months formal probation, 30 days jail, and 30 days in a work release program.
  • Summary of Incident: The subject was collecting worker’s compensation insurance and Unemployment Insurance benefits while self-employed working part-time and failed to report her wages to the EDD. This case was a mutual investigation with the California Department of Insurance.
09/06/17: Claimant Ordered to Pay Restitution for Disability Insurance and Paid Family Leave Fraud
  • County: Los Angeles
  • Court Case Number: BA452528
  • Amount Due to the EDD: $25,000
  • Claimant: Alexander Wichman
  • Conviction: On 05/10/17, the claimant pleaded guilty to one felony count of Section 550 (b)(3) of the Penal Code.
  • Sentence:  On 09/06/17, the claimant was sentenced to 36 months of summary probation, 20 days of work performed for CalTrans, and was ordered to pay $25,000 in restitution to the EDD. Based on full restitution completed by the date of sentence, the claimant’s felony conviction during May 2017 was reduced to a misdemeanor.   
  • Summary of Incident: The claimant submitted multiple forged Disability Insurance and Paid Family Leave claims during the years 2007 through 2016. The claimant falsified employer addresses to avoid detection by his true employers and was fully employed while collecting benefits from both benefit programs.
09/01/17: Claimant Convicted and Sentenced for Felony Disability and Unemployment Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA452786
  • Amount Due to the EDD: $39,717
  • Claimant: Ahmad “Andy” Atighi
  • Conviction: The claimant pleaded no contest during May 2017 and was convicted of one felony count of Section 550(2)(6) of the Penal Code.
  • Sentence:  On 09/01/17, the claimant was ordered to serve three months of summary probation, to complete 100 hours of community service, and to pay full restitution to the EDD. The community service was completed and full restitution was paid to the EDD by the date of sentence, therefore the felony conviction was reduced to a misdemeanor.
  • Summary of Incident: The claimant failed to report his work and earnings from multiple employers while receiving benefits from two Disability Insurance claims and one Unemployment Insurance claim.

August 2017

08/30/17: Claimant Sentenced to Jail for Disability Insurance Fraud
  • County: Kern
  • Court Case Number: BF166171A
  • Amount Due to the EDD: $32,803
  • Claimant: Joram Cortez
  • Conviction: The claimant pleaded no contest to one felony count of Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was sentenced to 45 days jail (eligible for work release program), 1,040 hours of community service, and was ordered to pay restitution to the EDD through the Kern County Probation Office.
  • Summary of Incident: The claimant filed a claim for Disability Insurance during 2015 and received benefits for approximately one year while working and earning income as a self-employed individual. The claimant failed to report his income and continued to declare himself unable to perform his regular work because of a disability. The claimant also alleged ongoing symptoms to his physician to continue certification of being unable to perform his customary work.
08/16/17 Claimant Jailed for Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA457421
  • Amount Due to the EDD: $13,100
  • Claimant: Angeline Burgeno
  • Conviction: The claimant pleaded to one felony count of Section 2101(a) of the California Unemployment Insurance Code. 
  • Sentence: The claimant was sentenced to three years formal probation, was ordered to serve eight days in county jail, to perform ten days of work for CalTrans, and was ordered to pay full restitution to the EDD through the Los Angeles County Probation Department.
  • Summary of Incident: The claimant forged a doctor’s signature on numerous medical certifications and submitted them to the EDD to claim Disability Insurance benefits.

July 2017

07/18/17: Employer Agrees to Pay Restitution and Jail Sentence for Employment Tax Evasion and Insurance Fraud
  • County: Los Angeles
  • Court Case Number: To be determined
  • Amount Due to the EDD: $81,606
  • Employer: Jeong Hwan Kim operated 50 retail clothing stores in Los Angeles, Orange, San Diego, and Ventura counties.
  • Plea Agreement Pending: On 06/22/2017, Jeong Hwan Kim 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), and Section 11760(a) of the Insurance Code. Formal sentencing is scheduled to occur on a future date based on a plea agreement for the employer to pay $7.6 million dollars (EDD portion $81,606) restitution and two years of incarceration in county jail. If the employer fails to pay full restitution on or before 12/21/17, the court will no longer be bound by the agreement and the employer will be sentenced to 17 years in state prison.
  • Summary of Incident: From 2010 through 2016, investigation revealed the employer failed to report and evaded payment of sales, income, and payroll tax, including failure to report wages to insurance carriers. The employer was charged following a two-year investigation led by the Tax Recovery and Criminal Enforcement (TRaCE) Task Force. The California Attorney General’s Office prosecuted the case in coordination with the TRaCE taskforce, California Department of Justice, California Department of Tax and Fee Administration, Department of Insurance, Employment Development Department, and the Franchise Tax Board.
  • Media Release: The California Department of Tax and Fee Administration Office of Public Affairs issued a press release appearing in the Highland Area Chamber of Commerce Community News in the city of Highland in San Bernardino County:

    http://www.highlandnews.net/news/crime_and_fire/it-s-million-or-years-in-prison-for-tax-evading/article_f90ee83c-6f11-11e7-bdd4-bf8c0459cd75.html
07/17/17: Claimants Sentenced to Prison for False Testimony to Grand Jury Regarding Unemployment Insurance Fraud
  • County: Federal court, Sacramento
  • Court Case Number: 2:14-CR-0169 GEB
  • Amount Due to the EDD: $77,242
  • Claimants: Jasvir Kaur & Harjit Johal
  • Conviction: During a March 2017 jury trial, the claimants were found guilty of violating Section 1623, Title 18, of the United States Code.
  • Sentence: The claimants were each sentenced to two years in prison.
  • Summary of Incident: The claimants were found guilty of making false declarations before a grand jury. The claimants participated in a series of Unemployment and Disability Insurance fraud schemes in Yuba City. During 2014, the claimants were subpoenaed to testify before a federal grand jury investigating a fraud scheme associated with employer, Ray Khan Farm Labor Contracting. During their testimony, when questioned about their wages, the claimants falsely stated under oath that they picked peaches for Ray Khan and that they did not commit fraud. Investigation determined the claimants purchased paystubs from Ray Khan to report fictitious wages to the EDD which the claimants could then use to claim the maximum possible amount of Unemployment Insurance benefits.
  • Media Release: The United States Attorney’s Office Eastern District issued press releases:

    https://www.justice.gov/usao-edca/pr/sutter-county-women-sentenced-2-years-prison-making-false-statements-grand-jury

  • https://www.justice.gov/usao-edca/pr/sutter-county-women-found-guilty-making-false-statements-grand-jury
07/12/17: Claimant Ordered to Pay Restitution for Unemployment Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA456579
  • Amount Due to the EDD: $10,480
  • Claimant: Ryan Finn
  • Conviction: The claimant pleaded guilty to violation of Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay $10,480 restitution to the EDD, to serve 16 months in Los Angeles County jail, sentence suspended, and three years of formal probation.
  • Summary of Incident: The claimant failed to report his work and earnings while collecting Unemployment Insurance benefits.

June 2017

06/27/17: Claimant Convicted and Sentenced for Unemployment Insurance Fraud
  • County: Los Angeles
  • Court Case Number: GA101054
  • Amount Due to the EDD: $9,315
  • Claimant: Ricardo Capra
  • Conviction: The claimant pleaded guilty to one misdemeanor count of Section 487(a) of the Penal Code.
  • Sentence: The claimant was sentenced to 36 months summary probation, ordered to perform 300 hours of community service, and to pay full restitution which has been received.
  • Summary of Incident: The claimant failed to report work and earnings while collecting Unemployment Insurance benefits.
06/22/17: Employer Sentenced to Jail and Ordered to Pay Restitution for Employment Tax Evasion and Insurance Fraud
  • County: Orange
  • Court Case Number: 15CF2616
  • Amount Due to the EDD: 
    • $240,819 American Blacktop Inc.
    • $1,645,507 The Mavrick Company
  • Employer: Darrin Wilson DBA American Blacktop Inc. and The Mavrick Company
  • Conviction: The employer pleaded guilty to felony violations of Sections 11880(a) and 11760 (a) of the Insurance Code, and Sections 2117.5 and 2118.5 of the California Unemployment Insurance Code.
  • Sentence: The employer was sentenced to five years in state prison, sentence suspended. The order is subject to being withdrawn upon payment of full restitution. The employer was placed on three years formal probation and was ordered to serve one year in county jail if restitution is paid..
  • Summary of Incident: The employer failed to accurately report employee wages to the EDD and failed to withhold and remit payroll tax withholdings and deductions from employee wages.
06/22/17: Clamant Convicted and Sentenced to Jail for Disability Insurance Fraud
  • County: San Mateo
  • Court Case Number: 16NF015014A
  • Amount Due to the EDD: $18,900
  • Claimant: Edwin Gatdula
  • Conviction: The claimant pleaded guilty to felony violations of Section 487(a) of the Penal Code.
  • Sentence: The claimant was sentenced to 30 days in the San Mateo County jail, ordered to pay $18,900 restitution to the EDD, and to serve three years of formal probation.
  • Summary of Incident: The claimant failed to report work and earnings while collecting Disability Insurance benefits.
06/16/17: Employer Co-conspirators Convicted and Ordered to Pay Over Nine Hundred Thousand Dollars for Employment Tax Evasion and Insurance Fraud
  • County: Contra Costa
  • Court Case Number: 5-162022-8
  • Amount Due to the EDD: $975,828
  • Employers: Yu Chen, Rongdi Zheng, Feng Gu, Shao Rong Zhang, and Zhou Xian Chen
  • Conviction: On 05/23/17, the following convictions occurred:
    • Yu Chen, Rongdi Zheng and Feng Gu pleaded no contest to felony charges of Section 2117.5 of the California Unemployment Insurance Code, Sections 182, 186.11, and 1199 of the Penal Code, Section 7153.5 of the Revenue and Taxation Code, and Section 11760 of the Insurance Code.
    • Shao Rong pleaded no contest to a misdemeanor charge of Section 1102.5(a) of the Labor Code.
  • Sentences: On 06/16/17, Yu Chen, Rongdi Zheng, and Feng Gu were each sentenced to three years and four months in jail. Yu Chen was ordered to pay restitution of $487,914. Rongdi Zheng was ordered to pay $314,940 and Feng Gu was ordered to pay $172,974.
  • Summary of Incident: The EDD received information from the Contra Costa District Attorney’s office of complaints filed with the Department of Industrial Relations Division of Labor Standards Enforcement against a restaurant known as Golden Dragon Buffet. The complaints included failure to pay overtime, failure to pay minimum wage, failure to provide meal and rest periods, and making late wage payments. An EDD investigation revealed the employers paid workers in cash and did not report workers or underreported wages paid to workers. The employers also kept a second set of books reflecting actual wages paid to workers. This is a joint case investigated by the Board of Equalization, Department of Industrial Relations, Department of Insurance, the Contra Costa District Attorney’s Office, and the EDD.
06/15/17: Claimant Convicted and Sentenced for Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: SA095363
  • Amount Due to the EDD: $11,288
  • Claimant: Shirin Joushanpoosh
  • Conviction: The claimant pleaded no contest to one misdemeanor count of Section 487(a) of the Penal Code.
  • Sentence: Three years of summary probation, 60 days of community service, and credit for two days in custody.
  • Summary of Incident: The claimant failed to report work and earnings while collecting Disability Insurance benefits.
06/08/17: Co-conspirators Convicted and Imprisoned for Unemployment Insurance Fraud
  • County: Sacramento
  • Court Case Number: 2:12-cr-00375-05 (defendant Walters), and 2:12-cr-00375-04 (defendant Taylor Jr.)
  • Amount Due to the EDD: $5,263,934
  • Employers: Andre A. Walters and Michael Ray Taylor Jr.
  • Convictions: 
    • Walters: Based on a 08/08/16 jury trial, Walters was found guilty of four counts of Section 1341, Title 18 of United State Code.
    • Taylor Jr.: On 06/8/17, Taylor Jr. pleaded guilty to one count of Section 371, Title 18 of United States Code.
  • Sentences: 
    • Walters: On 06/15/17, Walters was sentenced to imprisonment for 73 months, ordered to participate in 500 hours of Bureau of Prisons Substance Abuse Treatment Program, and to serve 36 months of supervised release. (No restitution order was issued in lieu of the prison sentence.)
    • Taylor Jr: On 6/8/17, Taylor Jr. was sentenced to federal prison for 15 months and upon release to serve 12 months of supervised release. Taylor Jr. was ordered to pay restitution to the EDD joint and severally with co-defendants in the amount of $188,175.
  • Summary of Incident: During the period of 2008 to 2011, Walters participating with co-conspirators including Taylor Jr., created several fictitious employers and then used the names of approximately 500 nonexistent employees to collect more than $5 million in Unemployment Insurance benefits. Walters acted as a “manager” responsible for the recruitment and management of over 500 fraudulent Unemployment Insurance claims then splitting proceeds of benefit checks paid to the alleged “employees” he recruited. This case was a mutual investigation by the U.S. Department of Labor, Office of Inspector General, and the California EDD.
06/07/17: Claimant Convicted and Sentenced for Unemployment Insurance Fraud
  • County: San Bernardino
  • Court Case Number: 16CR-066480
  • Amount Due to the EDD: $11,484
  • Claimant: Kevin A. Smith
  • Conviction: The claimant pleaded guilty to one misdemeanor count of Section 2101(a) of the California Unemployment Insurance Code. The claimant has paid full restitution plus a 30 percent administrative penalty.
  • Sentence: The claimant was sentenced to 36 months of summary probation.
  • Summary of Incident: The claimant failed to report work and earnings while collecting Unemployment Insurance benefits.
06/01/17: Claimant Sentenced for Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA413399
  • Amount Due to the EDD: $30,290
  • Claimant: Scott Anderson
  • Conviction: On 02/05/14, the claimant pleaded guilty to one felony count of Section 487 of the Penal Code. The conviction was reduced to a misdemeanor on 6/1/17 after the claimant completed restitution payments in full plus a 30 percent administrative penalty.
  • Sentence: The claimant was sentenced to three years of summary probation and ordered to perform one day of community service.
  • Summary of Incident: The claimant failed to report work and earnings while collecting Disability Insurance benefits.

May 2017

05/15/17: Claimant Convicted and Sentenced for Felony Unemployment Insurance Fraud
  • County: Alameda
  • Court Case Number: 16-CR-003116
  • Amount Due to the EDD: $17,900
  • Claimant: Cira Sara Flores Lozano
  • Conviction: On 03/27/17 the claimant pleaded guilty to one felony count of Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to serve one day in jail, pay restitution of $17,900 under a diversion program, and perform 80 hours of community service.
  • Summary of Incident: The claimant failed to report work and earnings while certifying for Unemployment Insurance benefits.
05/12/17: Employer Sentenced to Jail and Ordered to Pay Restitution for Employment Tax Evasion
  • County: Orange
  • Court Case Number: 14CF0900
  • Amount Due to the EDD: $78,230
  • Employer: Grace S. Han, DBA Grace S. Han, Inc.
  • Sentence: A jury trial during January 2017 found the employer guilty of felony violations including Section 2118.5 of the California Unemployment Insurance Code, Section 242 of the Penal Code, and Section 3700.5 of the Labor Code. The employer was ordered to pay restitution to the EDD, to serve 30 days in the Orange County jail beginning 07/07/17, perform 50 hours of community service, and 60 months of formal probation.
  • Summary of Incident: The employer failed to report her employees to the EDD and pay taxes. The employer also failed to secure workers’ compensation insurance and committed battery upon a State inspector.
05/10/17: Claimant Convicted for Disability Insurance Fraud
  • County: Sacramento
  • Court Case Number: 14F01088
  • Amount Due to the EDD: $10,102
  • Claimant: Alexandra Johnson
  • Conviction: The claimant pleaded guilty to one felony count of Section 487(a) of the Penal Code.
  • Sentence: Sentence is continued to a future date.
  • Summary of Incident: The claimant failed to report work and earnings while collecting Disability Insurance benefits.
05/01/17: Claimant Convicted and Sentenced to Jail for Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: NA104576
  • Amount Due to the EDD: $81,285
  • Claimant: Taleana Lee
  • Conviction: The claimant pleaded guilty to felony violations of Section 2101(a) of the California Unemployment Insurance Code and Sections 118(a), 470(b), 473(a), 487(a), and 530.5(a) of the Penal Code.
  • Sentence: The claimant was sentenced to 270 days in the Los Angeles County jail, ordered to pay $81,285 restitution to the EDD, and serve five years of formal probation.
  • Summary of Incident: The claimant forged the identity of doctors to authorize claims and failed to report her work and earnings while certifying for Disability Insurance benefits.

April 2017

04/21/17: Federal Subcontractor Sentenced for Employment Tax Evasion
  • County: Sacramento
  • Court Case Number: 16FE002175
  • Amount Due to the EDD: $36,890 (court ordered tax liability to the EDD)
  • Employer: Makram Amirhom Hanna DBA Transamerica Services and Technical Supply, Inc.
  • Conviction: On 02/14/17, the employer pleaded no contest to one felony count of Section 2101.5 of the Unemployment Insurance Code and one felony count of Section 19706 of the Revenue and Taxation Code.
  • Sentence: The employer was sentenced to four years of formal probation and 18 months of home detention. He was also ordered to pay $36,890 restitution to the EDD, $6,755 restitution to the Franchise Tax Board, and $10,000 to the Board of Equalization for the cost of the investigation.
  • Summary of Incident: The allegation came from the Office of Inspector General, United States Postal Service (USPS) who requested assistance from the Board of Equalization Tax Recovery and Criminal Enforcement (TRaCE) Task Force, for criminal investigation. The initial allegation indicated the employer was subcontracted by the USPS to transport mail to and from various post offices in California. He employed approximately 10 to 15 individuals whom he was misclassifying as corporate officers, failing to pay prevailing wages as required by the contract, and failing to secure workers’ compensation insurance. Investigation revealed the employer failed to report all of his employees and their wages to the EDD. An EDD audit uncovered $905,982 in wages that were not reported to the EDD from 01/01/09 through 09/30/14.
  • Media Release: The Board of Equalization issued a news release:
    https://www.boe.ca.gov/news/2017/Ohiomansconvictionontime.htm
04/20/17 Claimant Convicted and Sentenced for Unemployment Insurance Fraud
  • County: Fresno
  • Court Case Number: F16-905280
  • Amount Due to the EDD: $17,264
  • Claimant: Enid Perez
  • Conviction: The claimant pleaded no contest to misdemeanor violation of Section 2117 of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to perform 40 hours of community service, to serve two years of probation, and to pay a $250 sentencing fine and a $150 probation fine. The claimant paid full restitution of $22,443 during sentencing including a 30% administrative penalty.
  • Summary of Incident: The claimant was certifying for Unemployment Insurance benefits while working and not reporting income.
04/20/17 Claimant Convicted and Sentenced to Prison for Disability Insurance Fraud
  • County: Eastern District Federal Court, Sacramento
  • Court Case Number: 2:14CR00304-01
  • Amount Due to the EDD: $525,428
  • Claimant: Zeffery Cain (co-conspirator)
  • Conviction: The claimant pleaded guilty to felony violation of Section 371, Title 18, of the United States Code.
  • Sentence: The claimant was sentenced to 46 months in prison, was ordered to pay restitution in the amount of $525,428.99, and to serve three years’ probation.  The claimant is currently serving time in a county facility and will be transferred to a federal prison.
  • Summary of Incident:  This case involved a scheme of co-defendants to defraud the EDD of approximately two million dollars. Zeffery Cain and co-conspirators created false doctor and claimant profiles from stolen identities. The profiles were used to file over 200 Disability Insurance claims that were certified with the fraudulent doctor profiles. A federal indictment was obtained for all three claimants during October 2014.  All three claimants have now plead and have been sentenced.  This case was a joint effort by the EDD, the US Postal Inspection Service, the US Marshall Service, and the Modesto, Stockton and Oakland Police Departments.
04/12/17 Claimant Ordered to Make Restitution for Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA443207
  • Amount Due to the EDD: $ 21,837
  • Claimant: Crystal Jordan
  • Sentence: The claimant pleaded to felony violation of Section 2101(a) of the California Unemployment Insurance Code on 08/25/16. The plea was amended to one misdemeanor count for which the claimant was sentenced to three years of summary probation, ordered to perform 200 hours of community service, and to make restitution to the EDD in the amount of $21,827. The claimant has paid $11,000 in restitution thus far and was given one day custody credit. 
  • Summary of Incident: The claimant failed to report her work and earnings while certifying for Disability Insurance benefits.

March 2017

03/28/17: Claimant Convicted and Sentenced to Jail for Unemployment Insurance Fraud
  • County: Ventura
  • Case 2016020304
  • Restitution ordered: $45,000
  • Defendant: Richard Dubuke
  • Conviction: The defendant pleaded guilty to misdemeanor violation of Section 2101(a) of the California Unemployment Insurance Code and was ordered to pay $45,000 in restitution to the EDD, to serve 180 days Ventura County jail beginning 09/28/2017, and 60 months of summary probation.
  • Summary of Incident: The defendant falsified employer records and fraudulently collected California Unemployment Insurance benefits using the Social Security numbers of his two sons.
03/27/17: Employer Ordered to Pay Restitution for Employment Tax Fraud
  • County: Sacramento
  • Court Case Number: 5F06529
  • Amount Due to the EDD: $64,082
  • Employer: Fumeei Nikko Wu DBA The Old Brewery, LLC
  • Restitution Hearing: On 03/08/17, a restitution hearing was held at the Sacramento County Superior Court. The judge issued a ruling ordering the employer to pay restitution to the EDD $46,255 plus the cost of investigation of $17,827.
  • Summary of Incident: The Board of Equalization, Tax Recovery and Criminal Enforcement (TRaCE) Task Force received a request for assistance from the Department of Alcoholic Beverage Control (ABC) regarding the employer who was in violation of ABC license requirements. Investigation revealed the employer failed to report all of her employees and their wages to the EDD. An audit determined that wages were not reported to the EDD for the period between 07/01/11 through 09/30/14. On 07/28/16, the employer pleaded no contest to five felony counts, one each, of Sections 2101.5, 2106, 2108, 2117.5 and 2118.5 of the California Unemployment Insurance Code. On 10/20/16, the employer was sentenced to five years of formal probation and 37 days in county jail.   
03/24/17: Employer Convicted for Tax Evasion and Insurance Fraud
  • County: Sacramento
  • Court Case Number: 13F01859
  • Amount Due to the EDD: $77,242
  • Employer: Richard Young DBA Freeman and Young Construction, Inc.
  • Conviction: On 03/24/17, Young pleaded to felony violations of Section 11880(a) of the Insurance Code and Section 2117.5 of the California Unemployment Insurance code. Freeman pleaded to the same felony violations on 03/23/16.  As a condition of the pleadings, both defendants were ordered to make restitution of $77,242 to EDD, jointly and severally. Young's plea included 240 days jail for two felony counts with an opportunity to reduce the charges to misdemeanors if he pays the restitution. Freeman's plea agreement included 180 days jail for two felony counts with an opportunity to reduce the charges to misdemeanors and jail time reduced to 90 days if he pays the restitution.
  • Sentence: Formal sentencing is scheduled for a future date to include review of restitution payments.
  • Summary of Incident: The employers failed to report, withhold, and pay taxes to the EDD and for workers’ compensation insurance. 
03/22/17: Claimant Convicted and Sentenced for Unemployment Insurance Fraud
  • County: San Diego
  • Court Case Number: SCN340334-02
  • Amount Due to the EDD: $11,115
  • Claimant: Pedro Rodriguez
  • Conviction: The claimant was found guilty in trial of felony counts of Sections 470(b), 166(a)(4), 182(a)(1), 182(a)(5) of the Penal Code, and Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay $11,115 in restitution to the EDD and to serve 18 years state prison based on violations including those unrelated to EDD.
  • Summary of Incident: This was a joint investigation between the San Diego County District Attorney’s Office and the EDD. The claimant was incarcerated and failed to report his incarceration to the EDD while collecting Unemployment Insurance benefits.

February 2017

02/27/17: Employer Convicted for Tax Evasion and Withholding Wage Payments to Employees
  • County: Tulare County
  • Court Case Number: 12-002371
  • Amount Due to the EDD: $76,026
  • Employer: Jorge M. Perez DBA Golden Brothers Contracting (one employer among several other businesses associated with this case under ongoing investigation).
  • Conviction: The employer pleaded guilty to one misdemeanor count of Section 2117.5 of the California Unemployment Insurance Code.
  • Sentence: Sentencing will be scheduled at a future date.
  • Summary of Incident: The employer operated a farm labor contracting business with a partner.  The employer was issuing payroll checks and allowing the checks to clear the bank and then voiding the checks in his computer accounting system. Voiding of the checks removed all the payments to the individuals from appearing on payroll reports created by the accounting system. The employer then created a payroll journal omitting the voided checks and the remaining balance was reported as the true payroll of the business. The amount of the unreported wages to the EDD was $1,675,633 for the period of 10/01/10 through 06/30/11.
02/17/17: Employer Convicted, Sentenced to Jail, and Ordered to Pay Restitution for Tax Evasion and Insurance Fraud
  • County: Kings County
  • Court Case Number: 16CM-2386
  • Amount Due to the EDD: $61,358
  • Employer: Flavio Martins DBA Top Line Dairy
  • Conviction: The defendant pleaded guilty to all felony charges as follows: one count of Section 11760(a) and two counts of Section 11880(a) of the Insurance Code. All other counts were dismissed with a Harvey Waiver including the EDD charges. (A Harvey waiver allows the court to consider dismissed charges during sentencing in a criminal case.)
  • Sentence: Five years formal probation with the following conditions: 120 days in jail with credit for one day, fines including a $10,000 state restitution fine, and restitution paid to the EDD $61,357 (check received). The employer also paid amounts owed to the State Compensation Insurance Fund and insurance carrier prior to sentencing.
  • Summary of Incident: The employer failed to accurately report employee wages to their insurance carrier, the State Compensation Insurance Fund, and the EDD, and failed to remit payroll tax withholdings and deductions from their employees’ wages. The employer also failed to initially register with the EDD when becoming an employer; instead, reporting 11 quarters to the EDD subsequent to that event.
02/15/17: Employer Convicted of Felony Charges and Jailed for Tax Evasion and Insurance Fraud
  • County: Santa Barbara
  • Court Case Number: 1472724
  • Amount Due to the EDD: $167,676
  • Employer: Alberto Rodriguez DBA United Seal Coating and Slurry Seal
  • Conviction: On 07/20/16 the employer pleaded guilty to one felony count each of Section 2117.5 of the California Unemployment Insurance Code, Section 1871.4(a)(1) of the Insurance Code, Section 19705(a)(1) of the Revenue and Taxation Code, and one misdemeanor count of Section 1779 of the Labor Code.
  • Sentence: The employer was sentenced to 364 days in jail and ordered to serve three years of probation and to pay restitution to the EDD, Franchise Tax Board, State Compensation Insurance Fund and their insurance carrier.
  • Summary of Incident: The employer failed to withhold and remit payroll tax withholdings and deductions from their employees’ wages and failed to accurately report employee wages to the EDD, State Compensation Insurance Fund, and their insurance carrier.
02/10/17: Claimant Sentenced for Submitting Forged Claim Certifications to Collect Disability Insurance Benefits
  • County: Los Angeles
  • Court Case Number: BA400617
  • Amount Due to the EDD: $21,480
  • Claimant: Christopher A. Perez
  • Conviction: The claimant previously pleaded guilty to one felony count of Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The conviction was reduced to a misdemeanor with court ordered restitution of $21,480, to perform 100 hours of community service, and one year of summary probation.
  • Summary of Incident: The claimant submitted forged medical documents to obtain State Disability Insurance benefits to which he was not entitled.
02/09/17: Claimant Convicted, Sentenced to Jail, and Ordered to Pay Restitution for Disability Insurance Fraud
  • County: Sacramento,  Eastern District, federal court
  • Court Case Number: 2:14CR00304-01
  • Amount Due to the EDD: $992,428
  • Claimant: Jermila McCoy (co-conspirator)
  • Conviction: The claimant pleaded guilty to Section 1349, Title 18 of the United States Code.
  • Sentence: The claimant was sentenced to 110 months in prison, ordered to pay restitution in the amount of $992,428, and three years probation. The claimant was ordered to surrender directly to the prison on 06/22/17.
  • Summary of Incident: The claimant and two other individuals, conspired to create false doctor and claimant profiles from stolen identities. The profiles were used to file over 200 claims that were certified based on the fraudulent doctor profiles. A federal indictment was obtained for the claimant and the other defendants during October of 2014. The second defendant was sentenced in December 2016, and the plea and sentencing of the third defendant is still pending. This case was a joint effort by the EDD, US Postal Inspection Service, US Marshall Service, and the Modesto, Stockton, and Oakland Police Departments.
02/07/17: Self-Employed Claimant Convicted for Disability Insurance Fraud
  • County: Kern
  • Court Case Number: BF166171A
  • Amount Due to the EDD: $32,803
  • Claimant: Joram Cortez
  • Conviction: The claimant pleaded no contest to one felony count of Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: Sentencing is continued to a future date.
  • Summary of Incident: The claimant filed a Disability Insurance claim in 2015 and received benefits for approximately one year while driving a truck. The claimant described symptoms to his physician that could not be verified and thus obtained continued medical certification to being unable to perform his customary work.

January 2017

01/30/17: Claimant Convicted of Unemployment Insurance Fraud and Ordered to Pay Restitution to the EDD
  • County: San Bernardino
  • Court Case Number: FSB1600341
  • Amount Due to the EDD: $5,700
  • Claimant: Stefania I. Conejeros
  • Conviction: The claimant pleaded guilty to misdemeanor Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay $5,700 in restitution to the EDD and to serve three years of summary probation.
  • Summary of Incident: The claimant was employed and failed to report her work and earnings to the EDD while collecting Unemployment Insurance benefits.
01/27/17: Employer Jailed and Ordered to Pay Restitution for Tax Evasion
  • County: Orange
  • Court Case Number: 12ZF014/12CF3513
  • Amount Due to the EDD: $642,819
  • Employer: Ernesto Eric Enriquez DBA Best Value Roofing Co, Inc.
  • Conviction: The employer pleaded guilty to 66 felony counts that included ten counts each of Section 2117.5 and 2118.5 of the California Unemployment Insurance Code.
  • Sentence: The employer was sentenced to state prison for six years, sentence suspended, was ordered to serve 364 days in County Jail, and was placed on supervised probation for ten years.
  • Summary of Incident: The employer was underreporting employees to the EDD and misclassifying employees to their workers’ compensation insurance carrier.
01/26/17: Claimant Jailed and Ordered to Pay Restitution for Unemployment Insurance Fraud
  • County: Ventura
  • Court Case Number: 2015004181
  • Amount Due to the EDD: $4,732
  • Claimant: Ricardo R. Magana
  • Conviction: The claimant pleaded guilty to felony Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay $4,732 in restitution to the EDD and to serve 16 months in custody of the Department of Corrections and Rehabilitation.
  • Summary of Incident: The claimant was in custody in the Ventura County jail while collecting Unemployment Insurance benefits.
01/24/17: Claimant Convicted and Ordered to Pay Restitution for Unemployment Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA446781
  • Amount Due to the EDD: $21,130
  • Claimant: Andrew M. Yoshida
  • Conviction: The claimant pleaded guilty to Section 2101 of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay $21,130 in restitution to the EDD ($7,000.00 paid and balance remaining of $14,130), was ordered to perform 30 days of community labor, and to serve five years of formal probation.
  • Summary of Incident: The claimant was employed and failed to report his work and earnings while collecting Unemployment Insurance benefits.
01/24/17: Employer Ordered To Pay Restitution for Tax Evasion and Workers’ Compensation Fraud
  • County: Alameda
  • Court Case Number: 468126-7
  • Amount Due to the EDD: EDD tax liability to be determined in addition to payments owed to the State Compensation Insurance Fund.
  • Employer: Peter Choy DBA Heng Yuan Engineering
  • Conviction: On 11/30/16, the employer pleaded guilty to misdemeanor charges of Section 510 of the California Labor Code, Section 2108 of the California Unemployment Insurance Code, and Section 11880 of the California Insurance Code.
  • Sentence: The employer was ordered to pay restitution based on a total tax liability to be determined by the EDD in addition to restitution ordered for payment to the State Compensation Insurance Fund. The employer was also ordered to pay $270 in court fines and to serve four years of court probation.
  • Summary of Incident: The employer was not registered with the EDD and did not have workers' compensation insurance.
01/18/17: Claimant Convicted and Sentenced For Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA445006
  • Amount Due to the EDD: $41,762
  • Claimant: Amanda M. Moreno
  • Conviction: The claimant pleaded no contest to felony counts of Section 2101(a) and Section 2116(b) of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay full restitution directly to the EDD, perform 300 hours of community service, credited for three days incarceration, and five years of summary probation.
  • Summary of Incident: The claimant was employed while receiving Disability Insurance benefits from five separate claims, and Unemployment Insurance benefits from one claim. She failed to report her work and earnings to the EDD, and also submitted forged medical certification documents to claim benefits.
01/17/17: Claimant Convicted of Unemployment Insurance Fraud and Ordered to Pay Restitution to the EDD
  • County: Los Angeles
  • Court Case Number: PA086903
  • Amount Due to the EDD: $13,350
  • Claimant: Ileanna Petersen
  • Conviction: The claimant pleaded no contest to one felony count of Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay full restitution of $13,350 to the EDD, to serve three years formal probation, and to perform 45 days of Caltrans work or community labor.
  • Summary of Incident: The claimant was employed and failed to report her work and earnings to the EDD while collecting Unemployment Insurance benefits.
01/13/17: Claimant Jailed and Ordered to Pay Restitution for Unemployment Insurance Fraud
  • County: Orange
  • Court Case Number: 12ZF0145
  • Amount Due to the EDD: $5,956
  • Claimant: Sheila Marie Dimauro
  • Conviction: The claimant pleaded guilty and was convicted of felony Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was sentenced to 120 days in jail, five years formal probation, and was ordered to pay full restitution to the EDD through the Orange County District Attorney’s Office.
  • Summary of Incident: The claimant was self-employed and failed to report her earnings while collecting Unemployment Insurance benefits.
01/09/17: Claimant Ordered to Pay Restitution for Unemployment Insurance Fraud
  • County: Tuolumne
  • Court Case Number: CRF51071
  • Amount Due to the EDD: $12,150
  • Claimant: Mary Brown
  • Conviction: On 12/19/16 the claimant pleaded no contest to misdemeanor Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay restitution of $12,150 and was sentenced to three days jail and 180 days of house arrest with electronic monitoring.
  • Summary of Incident: The defendant was employed and failed to report her work and earnings to the EDD while collecting Unemployment Insurance benefits.
01/09/17: Claimant Imprisoned for Two Years and Ordered to Pay Full Restitution for Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA443102
  • Amount Due to the EDD: $27,568
  • Claimant: Iris L. Hurtado
  • Conviction: On 12/06/16 the claimant pleaded guilty and was convicted of one count of Section 550(b) of the Penal Code and one count of Section 2101(a) of the California Unemployment Insurance Code.
  • Sentence: The claimant paid full restitution to the EDD on the day of sentence. She was sentenced to two years in state prison and was remanded into custody on the date of sentence.
  • Summary of Incident: The claimant certified for Disability Insurance benefits using forged medical documents.  She also worked while collecting benefits.