A frontrunner to be president-elect Joe Biden's labor secretary oversaw the payment of nearly $1 billion in fraudulent benefits to California prison inmates.
Julie Su is the secretary of California's Labor and Workforce Development Agency, which operates the state's pandemic unemployment system. The system paid out hundreds of millions of dollars in fraudulent unemployment payments to prison inmates and convicts, prosecutors announced on Tuesday.
The fraud involved over 35,000 unemployment claims filed between March and August under the names of California state prison inmates. The inmates included two serial killers responsible for the deaths of at least eight people, as well as the well-known murderer Scott Peterson, who was convicted in 2004 for killing his pregnant wife. The Sacramento County district attorney called the scandal "one of the biggest fraud of taxpayer dollars in California history."
A spokeswoman for the agency's Employment Development Department told the Washington Free Beacon the department has been working with the U.S. Labor Department to identify fraudulent claims from inmates and is "pursuing how to integrate such cross-matches moving forward as part of enhanced prevention efforts during this unprecedented time of pandemic-related unemployment fraud across the country."
The agency's logistical problems also resulted in the delay of unemployment payments for as many as 1.8 million Californians during the initial stages of the state's shutdown over the coronavirus pandemic.
Su took responsibility for the agency's logistical delays in April. She said she needed to "own the things that we are not doing right" and fix the agency's problems. The Employment Development Department still experienced delays and fraud throughout the year, however, and faced demands from lawmakers for an audit in September.
President-elect Biden's transition team did not respond to a request for comment on Su's candidacy for labor secretary.
One of the district attorneys leading the task force investigating the fraud said the "vast majority" of the money will never be repaid.
California is not the only state to be plagued by unemployment fraud amid the coronavirus pandemic. The Labor Department's inspector general said a total of $26 billion in federal aid programs could be lost to fraud by the end of the crisis.