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 Year Fraud Convictions: 2017 | 2016

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

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October 2018

10/26/18 Claimant Jailed for Disability and Unemployment Insurance Fraud
  • County: Riverside
  • Court Case Number: RIF1801653
  • Amount Due to the EDD: $22,077
  • Suspect: Priscilla Carmona
  • Conviction: The claimant pleaded guilty to felony violation of section 2101(a) of the Unemployment Insurance Code.
  • Sentence: The claimant was sentenced to the custody of the Riverside County Sheriff for 90 days. Formal probation was granted for a period of 60 months. Restitution was ordered in the amount of $22,077.
  • Summary of Incident: The claimant failed to report her work and earnings while collecting Disability and Unemployment Insurance benefits from four claims.
10/19/18 Claimant Convicted of Felony Violation for Disability Insurance Fraud
  • County: San Bernardino
  • Court Case Number: FWV17004015
  • Amount Due to the EDD: $6,752
  • Claimant: Zoila Ramirez
  • Conviction: The claimant pleaded no contest and was convicted of one felony count for violation of section 487(a) of the Penal Code.
  • Sentence: Sentencing is scheduled on a future date.
  • Summary of Incident: The claimant submitted forged medical certifications to claim Disability Insurance benefits.
10/19/18 Claimant Convicted of Felony Violation for Disability Insurance Fraud
  • County: San Bernardino
  • Court Case Number: FWV17004014
  • Amount Due to the EDD: $61,235
  • Claimant: Amanda Jean Bushnell
  • Conviction: The claimant pleaded no contest and was convicted for felony violation of section 487(a) of the Penal Code. 
  • Sentence: Sentencing is scheduled on a future date.
  • Summary of Incident: The claimant forged the signatures of three doctors on doctor/physician medical certificates that she used to file six Disability Insurance claims. The claimant worked for the doctors at the same time she was collecting benefits.
10/16/18 Claimant Sentenced for Disability Insurance Fraud
  • County: Ventura
  • Court Case Number: 2016004763
  • Amount Due to the EDD: $95,398
  • Claimant: Samuel I. Omoregie
  • Conviction: The claimant was convicted on 09/13/18 of felony violation of section 2101(a) of the Unemployment Insurance Code and was ordered to pay full restitution to the EDD.
  • Sentence: On 10/16/18 the claimant was sentenced to 30 days of community labor in lieu of jail with credit for one day served. The claimant was ordered to serve five years of formal probation that was reduced to three years based on his payment of full restitution to the EDD by the sentencing date.
  • Summary of Incident: The claimant failed to report his work and earnings while collecting Disability Insurance benefits on four separate claims.
10/16/18 Claimant Sentenced to Jail for Unemployment Insurance Fraud
  • County: Ventura
  • Court Case Number: 2016004696
  • Amount Due to the EDD: $24,884; the amount has been paid in full
  • Claimant: Dennis Culley
  • Sentence: Based on a previous conviction on 04/06/18 for misdemeanor violation of section 2101(a) of the Unemployment Insurance Code, the claimant was sentenced to serve 90 days in the Ventura County Jail and to serve 36 months of conditional probation upon release.
  • Summary of Incident: The claimant collected Unemployment Insurance benefits based on false wages reported under a fictitious employer registration to claim $24,884 in benefits fraudulently for the periods from 09/02/12 through 06/22/13 and 03/22/14 through 09/06/14.
10/11/18 Claimant Convicted and Ordered to Pay Restitution for Unemployment Insurance Fraud
  • County: Ventura County
  • Court Case Number: 2016004706
  • Amount Due to the EDD: $20,475
  • Claimant: Ivan Corona
  • Conviction: The claimant pleaded guilty to one count of section 2101(a) of the Unemployment Insurance Code.
  • Sentence: Sentencing is scheduled for 02/20/19 with an understanding the claimant will pay full restitution of $20,475.
  • Summary of Incident: The claimant collected Unemployment Insurance based on false wages reported from fictitious employers and collected benefits from 03/12/14 through 08/30/14 and 04/12/15 through 06/13/15.
10/09/18 Claimant Convicted and Ordered to Pay Restitution for Disability Insurance Fraud
  • County: San Bernardino
  • Court Case Number: FWV17004018
  • Amount Due to the EDD: $35,331
  • Suspect: Tamara F. Green
  • Conviction: The claimant pleaded no contest to one felony count of violating section 2101(a) of the Unemployment Insurance Code. She is to pay restitution prior to sentencing date.
  • Sentence: Sentencing is scheduled on a future date.
  • Summary of Incident: The claimant failed to report her work and earnings while collecting Disability Insurance benefits.
10/03/18 Claimant Convicted of Federal Violation for Unemployment Insurance Fraud
  • County: Los Angeles
  • Court Case Number: CR-16-796-JAK
  • Amount Due to the EDD: $548,309
  • Subject: Rolanda Ashley
  • Conviction: The claimant pleaded guilty to section 134, Title 18, of the United States Code.
  • Sentencing: Sentencing is scheduled on a future date that will include an order to pay full restitution of $548,309.
  • Summary of Incident: The claimant registered fictitious companies with the EDD and reported fictitious quarterly wages using stolen identities and those of known individuals as purported employees of the fictitious companies. The claimant later filed fraudulent Unemployment Insurance claims on the basis of the false wage credits and withdrew cash from ATM machines in the Los Angeles area using debit cards issued from the fraudulent claims. 

September 2018

09/26/18 Claimant Sentenced to Prison for Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: CR 18-88-DMG
  • Amount Due to the EDD: $523,958
  • Claimant: Sandra Robert
  • Conviction: The claimantpleaded guilty to violation of section 1349, Title 18 of the United States Code, conspiracy to commit mail fraud.
  • Sentence: The claimant was sentenced to 37 months in prison followed by three years of supervised release and was ordered to pay full restitution of $523,958 to the EDD.
  • Summary of Incident: The claimant, along with two other co-conspirators, filed fraudulent Disability Insurance claims using stolen identities and personal information. The co-conspirators were convicted and sentenced separately.
09/20/18 Claimant Sentenced to Prison for Unemployment Insurance Fraud
  • County: Federal Eastern District Court, Sacramento
  • Court Case Number: 2:17-CR-0600MCE
  • Amount Due to the EDD: $887,199 (total for five co-conspirators)
  • Claimant: Sergio Doriante Sanchez Reyna (one of five co-conspirators)
  • Conviction: On 05/03/18, the claimant pleaded guilty to one felony count of section 1341, Title 18, of the United States Code, mail fraud. 
  • Sentence: The claimant was sentenced to four years and three months in prison and was ordered to pay $436,091 in restitution for his role in a scheme to file fraudulent Unemployment Insurance claims.
  • Summary: Between 12/12/14, and 07/14/16, the claimant, with others, perpetrated a scheme to obtain benefit payment debit cards issued in the names of identity theft victims to fraudulently obtain Unemployment Insurance benefits. The conspirators filed at least 269 false claims attempting to obtain $2.5 million in fraudulent benefits. EDD’s actual overpayment was approximately $887,199. This case was investigated by the EDD mutually with U.S. Department of Labor Office of Inspector General, and the Federal Bureau of Investigation.
  • Media Release: The U.S. Attorney’s Office, Eastern District of California issued a press release describing the conviction.
09/19/18 Employer Convicted of Employment Tax Fraud
  • County: Fresno
  • Amount Due to the EDD: $25,847
  • Employer: Dewayne and Kimberly Chatman DBA California Trauma Tech (CTT), LLC.
  • Conviction: Dewayne Chatman pleaded no contest to felony violation of section 2118.5 of the Unemployment Insurance Code. Upon payment of restitution by the end of probation term, the conviction will be reduced to a misdemeanor.  Kimberly Chatman pleaded no contest to misdemeanor violation of section 2106 of the Unemployment Insurance Code.
  • Sentencing: Sentencing is scheduled for a future date.
  • Summary of Incident: The Fresno County District Attorney Office contacted the EDD to verify registration for CTT. It was found that CTT was not registered with the EDD and paid $220,922 in wages to employees during 04/01/12 through 09/30/15 that were unreported to the EDD.
09/11/18 Claimant Convicted of Felony Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: NA107160
  • Amount Due to the EDD: $ 31,773
  • Claimant: Donell R. Wheaton
  • Conviction: The claimant pleaded nolo contendere and was convicted of one felony count of section 2101(a) of the Unemployment Insurance Code. 
  • Sentence: The claimant was ordered to pay restitution prior to sentencing scheduled to occur during 2019.
  • Summary of Incident: The claimant failed to report his work and earnings while collecting Disability Insurance benefits.
09/11/18 Claimant Sentenced to Jail for Unemployment Insurance Fraud
  • County: Ventura
  • Court Case Number: 2016004763
  • Amount Due to the EDD: $ 23,400
  • Claimant: Eric Erickson
  • Conviction: On 08/07/18 the claimant pleaded guilty to violation of section 2101(a) of the Unemployment Insurance Code.
  • Sentence: The claimant was ordered to serve 180 days in county jail, to serve 60 months of formal probation, and to pay restitution of $23,400 to the EDD.
  • Summary of Incident: The claimant participated in a scheme through which he provided his personal identification to establish that he was an employee of a fictitious employer with wages reported that enabled him to file and certify for fraudulent Unemployment Insurance benefits.
09/06/18 Claimant Convicted of Conspiracy to Commit Unemployment Insurance Fraud
  • County: Federal Eastern District Court, Sacramento
  • Court Case Number: 2:17-CR-0600MCE
  • Amount Due to the EDD: $887,199 (total for five co-defendants)
  • Claimant: Gregory Wayne Lee (one of five co-defendants)
  • Conviction: The claimant pleaded guilty to one felony count of section 1349, Title 18, of the United States Code, conspiracy to commit mail fraud; and one felony count of section 1028A, Title 18, of the United States Code, aggravated identity theft.
  • Sentence: Sentencing is scheduled for a future date.
  • Summary: Between 12/12/14, and 07/14/16, the claimant, with others, perpetrated a scheme to obtain benefit payment debit cards issued in the names of identity theft victims to fraudulently obtain Unemployment Insurance benefits. The conspirators filed at least 269 false claims attempting to obtain $2.5 million in fraudulent benefits. EDD’s actual overpayment was approximately $887,199. This case was investigated by the EDD mutually with U.S. Department of Labor, Office of Inspector General, and the Federal Bureau of Investigation.

August 2018

08/31/18 Employer Convicted and Sentenced for Felony Employment Tax Fraud
  • County: Riverside
  • Court Case Number: INF1702143
  • Amount Due to the EDD: $24,980
  • Employers: Carlos V. Valencia DBA Valencia Trimming
  • Conviction: The employer pleaded guilty to one felony count of section 2117.5 of the Unemployment Insurance Code and one felony count of section 11880(a) of the Insurance Code.
  • Sentence: The employer was ordered to pay restitution to the EDD in the amount of $24,980 and $99,455 to the State Compensation Insurance Fund (SCIF). Formal probation was also ordered for 36 months.
  • Summary of Incident: The employer operated a tree trimming business in Riverside County. The case was presented to the Riverside County District Attorney’s office by the SCIF for possible workers’ compensation premium fraud. While investigating the employer, the SCIF learned the employer was paying his employees in cash and the EDD joined the investigation.
08/16/18 Claimant Convicted and Sentenced to Jail for Unemployment Insurance Fraud
  • County: Federal Eastern District Court, Sacramento
  • Court Case Number: 2:17-CR-0600MCE
  • Amount Due to the EDD: $139,071 (defendant’s portion)
  • Defendant: Brittany Maunakea (one of five co-defendants)
  • Conviction: On 01/11/18 the defendant pleaded guilty to one count of section 1341, Title 18, of the United States Code, conspiracy to commit mail fraud.
  • Sentence: The defendant was sentenced to two and a half years in prison and was ordered to pay restitution in the amount of $139,071.
  • Summary: The defendants in this case obtained personal identifying information of U.S. citizens and legal residents and then fraudulently used that information to file fraudulent Unemployment Insurance claims in the names of the assumed identities. The conspirators filed over 269 claims and obtained approximately $2.5 million in benefits to which they were not entitled.
  • Media Release: The U.S. Attorney’s Office, Eastern District of California issued a press release on 08/16/18 describing the conviction. The Sacramento Bee newspaper reported the sentencing on 08/16/18.
08/16/18 Claimant Convicted and Sentenced to Jail for Unemployment Insurance Fraud
  • County: Sacramento
  • Court Case Number: 16FE020035
  • Amount Due to the EDD: $11,825
  • Claimant: Lisa Drisdon
  • Conviction: The claimant pleaded guilty to misdemeanor violation of section 487(a) of the Penal Code.
  • Sentence: The claimant was ordered to pay full restitution and was sentenced to five days in jail and three years of informal probation.
  • Summary of Incident: The claimant failed to report her work and earnings while claiming Unemployment Insurance benefits.
08/09/18 Employer Convicted and Sentenced for Employment Tax Fraud
  • County: Contra Costa
  • Court Case Number: 01-182137-0
  • Amount Due to the EDD: $23,063
  • Employer: Norma Middleton DBA R & N Middleton Residential Care, Inc.
  • Conviction: The employer pleaded no contest to one misdemeanor count each of section 2117.5 of the Unemployment Insurance Code for payroll tax fraud and section 11760(a) of the Insurance Code for workers’ compensation insurance fraud.
  • Sentencing: The employer was ordered to serve three years of court probation and 100 hours of community service, and to pay victim restitution in the amount of $78,973, of which $23,063 was ordered to the EDD and has been paid in full.
  • Summary of Incident: The employer operated a residential care facility that was jointly investigated by the EDD and the Contra Costa County District Attorney’s office. Investigation revealed the employer paid employee wages through personal checks and did not report those wages to the EDD and to their insurance carriers.
08/07/18 Claimant Convicted of Unemployment Insurance Fraud
  • County: Ventura
  • Court Case Number: 2016004702
  • Amount Due to the EDD: $23,400
  • Claimant: Eric Erickson
  • Conviction: The claimant pleaded guilty to two counts of section 2101(a) of the Unemployment Insurance Code.
  • Sentence: Sentencing is continued to a future date.
  • Summary of Incident: The claimant reported his personal identification information alleging that he was an employee of a fictitious employer with wages paid that allowed him to file and claim Unemployment Insurance benefits to which he was not entitled.
08/07/18 Claimant Convicted and Sentenced for Felony Disability Insurance Fraud
  • County: Los Angeles
  • Court Case Number: BA450597
  • Amount Due to the EDD: $29,632
  • Suspect: Jose Luis Valencia
  • Conviction: On 02/06/18, the claimant pleaded no contest to felony violation of section 487 of the Penal Code.
  • Sentence: The claimant was ordered to pay restitution of $29,632 to the EDD, to submit to electronic monitoring for 120 days, to perform 300 hours of community service, and to serve five years of formal probation.
  • Summary of Incident: The claimant failed to report his work and earnings while collecting Disability Insurance benefits.

July 2018

07/19/18 Employer Convicted and Sentenced to Pay Restitution for Employment Tax Fraud
  • County: San Diego
  • Court Case Number: CD 274285, SCD274285
  • Amount Due to the EDD: $39,835
  • Employer: Trai Minh Chau DBA CMT Engineering, Inc.
  • Conviction: The employer pleaded guilty to one felony count, each, of section 11760(a) of the Insurance Code and section 2117.5 of the Unemployment Insurance Code, and one misdemeanor count of section 3700.5(a) of the Labor Code.
  • Sentence: The employer was granted five years of informal probation, ordered to perform five days of community service and 100 hours of volunteer work, and to pay $39,835 restitution to the EDD, with an additional $39,835 to the State Compensation Insurance Fund, and $10,668 to their insurance carrier.
  • Summary of Incident: The employer committed insurance premium fraud by underreporting his payroll and failing to collect and remit payroll tax withholdings from his employees.
07/02/18 Claimant Jailed for Disability Insurance Fraud
  • County: Ventura
  • Court Case Number: 2017011966
  • Amount Due to the EDD: $22,553
  • Suspect: Savo Danovich
  • Conviction: The claimant pleaded guilty to one count of violating section 2101(a) of the Unemployment Insurance Code.
  • Sentence: The claimant was ordered to serve 210 days in the Ventura County Jail beginning on 11/01/18 and to serve 60 months of formal probation. The claimant was also ordered pay restitution of $22,553 to the EDD.
  • Summary of Incident: The claimant failed to report his work and earnings while certifying for Disability Insurance benefits.

June 2018

06/20/18 Claimants Convicted and Sentenced for Disability Insurance Fraud Using Stolen Identifications
  • County: Los Angeles
  • Court Case Number: CR 18-88-DMG
  • Amount Due to the EDD: $523,958
  • Suspects: Desiree Denise Durazo and Steven Rodriguez
  • Convictions: The claimants, Durazo and Rodriguez, independently pleaded guilty on respective dates 5/30/18 and 6/20/18 to conspiracy for violation of section 1349 Title 18 Part 1 of the United States Code.
  • Sentences:
    • On 05/30/18, Durazo was ordered to serve five years of probation and to participate for three months in a home detention program. She was also ordered to perform 1000 hours of community service (with a minimum of 200 hours per year) and was ordered to pay restitution of $523,958 to the EDD.
    • On 6/20/18, Rodriguez was sentenced to 72 months in prison, followed by three years of probation and was ordered to pay full restitution of $523,958 as the co-defendant with Durazo.
  • Summary of Incident: The co-conspirators filed Disability Insurance claims using stolen identifications.
06/5/18 Employers Jailed and Ordered to Pay Restitution for Employment Tax and Insurance Fraud
  • County: El Dorado
  • Court Case Number: P17CRF0422
  • Amount Due to EDD: $240,767
  • Employer: John Kipilo and Theresa Kipilo, dba Johnny Sparkles Cleaning Service Inc.
  • Conviction: On 06/05/18 John and Theresa Kipilo individually pleaded guilty to eight felony counts as follows with remaining counts dismissed under a Harvey Waiver:
    • Unemployment Insurance Code
      • One count of section 2108
      • One count of section 2110.3
      • Two counts of section 2117.5
    • Insurance Code
      • Three counts of section 11760 (a)
      • One count of section 11880 (a)
  • Sentence: John and Theresa Kipilo were each ordered to serve one day in county jail and 48 months of formal probation and were ordered to pay $141,386 in total restitution of which $44,055 is due to the EDD, including interest at the rate of 10% per annum. The total restitution amount may be reduced to $124,610 if a payment of $50,000 is made to the State Compensation Insurance Fund (SCIF) by 07/05/18. The restitution amount owed to the EDD will remain the same regardless of payment to SCIF.
  • Summary of Incident: The employer operated a residential cleaning company. The employer underreported employee wages to the EDD and to their insurance carriers.
  • Media Release: The Sacramento Bee newspaper reported the conviction in an article dated 06/21/18. https://www.sacbee.com/news/local/crime/article213582604.html
06/04/18 Employer Sentenced to Prison for Unemployment Insurance Fraud
  • County: Fresno
  • Court Case Number: 1:15-cr-00325-LJO-SKO
  • Amount Due to the EDD: $456,548
  • Suspect: Fernando Alanis
  • Conviction: On 10/18/17, Alanis pleaded guilty to two counts for violation of section 1341, Title 18, Part 1 of the United States Code.
  • Sentencing: Alanis was sentenced to three years and three months in prison.
  • Summary of Incident: Alanis was a supervisor with a local farm labor contractor that provided contract labor for growers and packers and organized them into crews managed by “crew bosses.” Alanis would hire and supervise crew bosses and facilitate the hiring of other laborers. Alanis provided the personal identifying information of individuals, including his relatives and other acquaintances, and to workers, some of whom were undocumented, so they could obtain employment with the farm labor contractor under the assumed identities. Those individuals then worked as seasonal farm laborers and earned wages. When the workers were laid off at the end of the season, Alanis assisted filing fraudulent Unemployment Insurance claims in the names of the assumed identities. The individuals lending their identities would share some of the benefits with Alanis, or would pay Alanis in advance of the Unemployment Insurance claims being submitted. This was a mutual investigation case with Department of Labor, Office of the Inspector General and Homeland Security, Homeland Security Investigations.
  • Media Release: The Office of the United States Attorney Eastern District of California issued a press release on 06/04/18.
  • https://www.justice.gov/usao-edca/pr/sanger-contract-labor-crew-boss-sentenced-over-3-years-prison-unemployment-insurance
06/1/18 Employer Jailed and Ordered to Pay Restitution for Employment Tax and Insurance Fraud
  • County: Riverside
  • Court Case Number: INF1500299
  • Amount Due to the EDD: $727,349
  • Employer: Jesse William Rhodes dba PB Realty Investments, Inc. and PB Construction Services, LLC.
  • Conviction: The employer pleaded guilty to two felony charges of section 11880(a) of the Insurance Code and section 2117.5 of the Unemployment Insurance Code.
  • Sentence: The employer was ordered to pay $45,000 in restitution to the EDD and was committed to the custody of the Riverside County Sheriff for one day. The employer was also ordered to serve 36 months of formal probation.
  • Summary of Incident: The employer operated a construction company in Santa Rosa, California. He was being investigated for possible workers’ compensation violations and payroll tax evasion. He underreported wages paid to his employees to the EDD and intentionally misclassified his employees as independent contractors to insurance companies.

May 2018

05/21/18 Claimant Convicted of Felony Unemployment Insurance Fraud and Ordered to Pay Restitution
  • County: San Bernardino
  • Court Case Number: FSB17004671
  • Amount Due to the EDD: $39,572
  • Claimant: Arturo Loya
  • Conviction: The claimant pleaded guilty to one felony count of section 2101(a)(1) of the Unemployment Insurance Code.
  • Sentence: The claimant was ordered to pay $730.00 in restitution to the EDD and to serve 36 months of probation.
  • Summary of Incident: The claimant failed to report his work and earnings while collecting Disability Insurance benefits.
05/21/18 Claimant Convicted of Unemployment Insurance Fraud
  • County: Ventura
  • Court Case Number: 2017011966
  • Amount Due to the EDD: $22,553
  • Suspect: Savo Danovich
  • Conviction: The claimant pleaded guilty to section 2101(a) of the Unemployment Insurance Code
  • Sentence: Continued to a future date for sentencing
  • Summary of Incident: The claimant failed to report his work and earnings while certifying for Disability Insurance Benefits.

April 2018

04/18/18 Employer Co-Owners Convicted for Felony Employment Tax Fraud
  • County: Santa Clara
  • Court Case Number: 215150
  • Amount Due to the EDD: $94,178
  • Employer: Ben Lew and Brian Wong DBA San Jose Organics, Inc.
  • Convictions: Ben Lew and Brian Wong pleaded guilty to:
    • One felony count of section 182(a)(1) of the Penal Code for conspiracy to violate section 11360(a) of the Health and Safety Code.
    • One felony count of sections 11359, 11360(a), 11366, 11366.5(a), and 11370.6 (Ben Lew only for section 11370.6) of the Health and Safety Code for controlled substance violations.
    • Three felony counts of section 7153.5 of the Revenue and Taxation Code for sales tax violations.
    • One felony count of section 11880(a) of the Insurance Code for workers’ compensation insurance fraud.
    • One misdemeanor count of section 3700.5 of the Labor Code for labor law violation.
    • One felony count of sections 2108, 2110.3, 2110.7, and 2117.5 of the Unemployment Insurance Code for payroll tax fraud.
    • Twenty-three felony counts of section 186.10(a) of the Penal Code, one felony count of section 14166 of the Penal Code, and six felony counts of section 11370.9(a) (Ben Lew only on all three sections) of the Health and Safety Code for money laundering violations.
    • One count of sections 186.11(a)(1) and (a)(3), and 186.11(a)(1) and (a)(2) of the Penal Code for aggravated white collar crime enhancements.
  • Sentencing: Sentencing is scheduled on a future date.
  • Summary of Incident: Ben Lew and Brian Wong operated a cannabis dispensary and claimed the employees were nonpaid “volunteers.” The investigation revealed they paid employees in cash and/or product in return for their services and intentionally failed to report employees’ wages to the EDD.
04/12/18 Claimant Convicted and Jailed for Disability Insurance Fraud
  • County: Sacramento
  • Court Case Number: 14F01088
  • Amount Due to the EDD: $10,102
  • Claimant: Alexandra Johnson (aka Macaluso)
  • Conviction: On 6/22/17, the claimant pleaded guilty to misdemeanor section 487(a) of the Penal Code.
  • Sentence: On 04/12/18, the claimant was sentenced to 120 days jail, five years formal probation, and was ordered to pay restitution.
  • Summary of Incident: The claimant failed to report her work and earnings while claiming Disability Insurance benefits.
04/02/18 Employer Convicted and Sentenced for Felony Employment Tax Fraud
  • County: Riverside
  • Court Case Number: RIF1701037
  • Amount Due to the EDD: $82,177
  • Employer: CGI Development, Inc; Carlos Gamez Jr. DBA G Group Construction
  • Conviction: On 04/02/18, the employer pleaded guilty to one felony count of section 11880(a) of the Insurance Code and one felony count of section 2118 of the Unemployment Insurance Code.
  • Sentence: The employer was ordered to serve 36 months of formal probation and was committed to the custody of the Riverside County Sheriff for 160 days; 156 days of which are to be served in a work release program.
  • Summary of Incident: The employer operated a construction company in Riverside County. He paid his employees in cash and failed to report their wages to the EDD and to the workers’ compensation insurance carriers.

March 2018

03/30/18 Claimant Convicted of Felony Disability Insurance Fraud
  • 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.
03/23/18 Claimant Sentenced to Prison for Unemployment Insurance Fraud
  • County: Santa Clara County
  • Court Case Number: C1370690
  • Amount Due to the EDD: $35,500
  • Claimant: Joseph Elliot
  • Conviction: On 04/17/17, the claimant pleaded guilty to two felony counts of section 487 and one felony count of section 530.5 of the Penal Code.  
  • Sentence: The claimant was sentenced to four years in prison and was ordered to pay $35,500 in restitution to the EDD. 
  • Summary: The claimant continued to work as a self-employed contractor while collecting Unemployment Insurance benefits.
03/01/18 Employer Convicted and Jailed for Felony Employment Tax Fraud
  • County: Contra Costa
  • Court Case Number: 01-182875-5
  • Amount Due to the EDD: $150,950
  • Employer: James Franklin Davis DBA New Era Foods Co and NSLP Solutions
  • Conviction: On 01/16/18, the employer pleaded no contest and was convicted of one count of section 2117.5 (felony) of the Unemployment Insurance Code, sections 136.1(c)(1) and 166(a)(4) (misdemeanor) of the Penal Code, and section 3700.5 (misdemeanor) of the Labor Code.
  • Sentence: On 01/16/18, the employer was sentenced to 180 days in county jail that may be satisfied by electronic home detention, and five years of formal probation. 
  • Restitution Ordered: On 03/01/18, the employer was ordered to pay $88,571 in restitution to the Department of Industrial Relations and $10,000 in fines for the Labor Code violation.
  • Summary of Incident: The employer operated a catering/food service company.  He failed to pay his employees all of their wages earned, deliberately failed to report employee wages he withheld for taxes, and failed to pay the withheld taxes to the EDD.

February 2018

02/06/18 Claimant Convicted of Felony Disability Insurance Fraud
  • 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 is scheduled later in 2018
  • Summary of Incident: The claimant failed to report his work and earnings while collecting Disability Insurance benefits.

January 2018

01/25/18: Employer Convicted and Sentenced for Employment Tax Evasion and Unemployment Insurance Fraud
  • 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 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.
01/23/18 Employer Convicted and Jailed for Felony Employment Tax Fraud
  • County: Contra Costa
  • Court Case Number: 01-176813-4
  • Amount due to the EDD: $75,758
  • Employer: Nathan Robert Moore dba NRM Renovations, Inc.
  • Conviction: On 01/18/18, the employer pleaded guilty and was convicted of one felony count of section 2117.5 of the Unemployment Insurance Code, section 11880(a) of the Insurance Code, and section 186.11(a)(3) of the Penal Code.
  • Sentence: On 01/23/18, the employer was sentenced to 90 days in county jail that may be satisfied by electronic home detention and five years of formal probation. His license with the Contractors State License Board will be suspended until he completes probation. The employer was also ordered to pay restitution of $75,758 to the EDD, $71,117 to the United States Department of Labor, $49,941 to the State Compensation Insurance Fund, and $49,350 and $174,451 respectively to two private insurance companies.
  • Summary of Incident: The employer operated a general construction company.  He paid his employees by check and cash and withheld taxes from his employees’ wages. He failed to report the full wages paid to his employees, failed to pay payroll taxes to the EDD, and failed to pay workers’ compensation insurance premiums.
01/22/18: Employer Convicted and Sentenced for Employment Tax Evasion and Insurance Fraud
  • 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, the 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.
01/22/18: Employer Convicted and Sentenced for Employment Tax Evasion and Insurance Fraud
  • 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 period of October 2006 through December 2013. An EDD audit uncovered $997,184 in wages that were not reported for that period.
01/17/18: Employer Sentenced to Prison for Sales Tax Evasion, False Income Tax Returns, and Workers’ Compensation Fraud
  • 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: The State Attorney General’s Office issued a press release on 01/17/18: https://oag.ca.gov/news/press-releases/attorney-general-becerra-retailer-sentenced-prison-56-million-fraud-scheme
01/12/18: Employer Convicted and Sentenced for Employment Tax Evasion and Insurance Fraud
  • 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. 
01/11/18: Claimant Convicted for Unemployment Insurance Fraud
  • 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.