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The extent to which California’s unemployment department has failed to address rampant fraud came into clearer focus on Thursday, when the state auditor released her second report of the week on the Employment Development Department.
Despite repeated warnings from federal authorities that fraudsters would target California, EDD waited six months and processed 7.4 million claims before it began flagging addresses with unusually high numbers of claims, the audit found. In “the most egregious example,” more than 1,700 claims came from a single address. EDD also paid $10.4 billion to claimants with unverified identities and $810 million to prison inmates. State labor officials confirmed this week the total fraud could reach $31 billion.