Former California EDD employee faked Dianne Feinstein to rip off jobless benefits, sources say

Federal officials have filed charges in three recently uncovered conspiracies to cheat the California pandemic unemployment benefit system, including one by a former Employment Development Department employee who was able to rip off more than $ 200,000, including a claim using the name of US Senator Dianne Feinstein.

Authorities said on Thursday that former EDD employee Andrea M. Gervais was involved in a mail fraud conspiracy in which she allegedly filed more than 100 bogus claims for pandemic unemployment assistance using information personal stolen, including a successful effort paid on behalf of Feinstein for $ 21,000.

“The senator’s office is aware that one person used the senator’s name – along with several others – to file fraudulent unemployment claims,” ​​said Tom Mentzer, a spokesperson for the senator. “The case will be handled by law enforcement and courts.”

Court documents indicate that Gervais previously worked for EDD from 2010 to 2018 as an office assistant under the name of Andrea Dangerfield. Gervais was fired by the agency in October 2018 after an internal investigation implicated her in the theft of a money order, according to a request for a search warrant for her house and car presented to a federal judge on December 11.

In that claim, investigators allege that a total of 12 claims totaling approximately $ 216,000 were paid by the agency, with the proceeds being sent to Gervais’ home in Roseville, a suburb of Sacramento. Benefits came from Pandemic Unemployment Assistance, a federally funded program authorized by the CARES Act to help on-demand workers, independent contractors and others.

Unfortunately, these UI benefits which were intended for Californians hardest hit by the end of the ongoing COVID-19 pandemic have become the target of what could turn out to be the biggest fraud scheme ever. perpetrated against taxpayers in California history, “said McGregor Scott, US Attorney for the Eastern District of California, whose office is pursuing the case. “This theft of taxpayer money intended to help our citizens in very difficult economic times simply will not be tolerated.

The investigation began when fraud investigators from Bank of America, which manages the benefits, discovered the Feinstein claim and became suspects, according to a source familiar with the investigation.

Bank investigators contacted the U.S. Department of Labor Inspector General, revealing he had found 17 California unemployment profiles and one Maryland claim, and issued 21 prepaid benefit debit cards to those claimants, all to the same Roseville mailing address as the claim. for the senator.

Subsequently, EDD California received a claim from Gervais on his own behalf, alleging that his on-shelf shopping hours at Goodwill Industries had been reduced.

When authorities matched this address in Gervais’ personal complaint with those in the suspicious claims, investigators began monitoring her in the wood-side duplex where the money had been sent. Roseville police arrested Gervais in January on identity theft charges for allegedly obtaining a credit card under false pretenses, but later dropped the charges for lack of evidence, the court file showed.

Investigators then looked at 44 ATM photos of Gervais using Bank of America debit cards, including the card issued in the senator’s name. Gervais was arrested Tuesday, federal officials said, and was released on $ 50,000 bail Wednesday after appearing in federal court. If found guilty, she could face a maximum of 20 years and a fine of $ 250,000 on each count.

Later that day, in another case, a former EDD contract worker in San Diego was charged in federal court with using her insider knowledge in claims processing to conspire with her boyfriend, who was in prison for murder, in a fraud scheme. to steal hundreds of thousands of dollars in unemployment benefits.

Nyika Gomez, 40, of San Diego, was employed in July by an EDD entrepreneur as a call center agent who helped individuals process their unemployment insurance. She was arrested after investigators alleged she conspired with her boyfriend, a prisoner serving a 94-year life sentence at California State Prison in Sacramento for murder.

Gomez allegedly obtained personally identifiable information from California prisoners with the help of her boyfriend, as well as stolen personal information from out-of-state residents, which she allegedly used to file unemployment claims fraudulent.

The arrests come a week after Bank of America, which provides EDD debit cards with unemployment benefits, estimated fraud could reach $ 2 billion in California after identifying 640,000 suspicious claims.

State officials recently estimated that around $ 400 million in fraudulent claims were filed on behalf of detainees.

Fraud involving EDD employees is an ongoing problem within the agency.

EDD has seen 16 former employees convicted of fraud over the past 10 years, said Loree Levy, a spokesperson for the agency.

More recently, authorities announced in March that a former EDD tax compliance representative had been sentenced to six years in prison for conspiring with five other people to obtain $ 887,199 in unemployment benefits in California based on fraudulent claims.

“EDD is committed to tackling aggressive fraudulent attacks on the unemployment benefit system and appreciates the collaborative efforts of federal, state and local partners in this common goal,” said Nancy Farias, director, Thursday. EDD assistant.

A state task force investigating fraud in the prison system is trying to determine whether any of the bogus EDD allegations involved jobs involving employees, said Brian Ferguson, spokesperson for the Office of Human Services. emergency from the governor of California, who oversees a task force investigating prison fraud.

“The scope of the task force’s investigative work includes identifying those involved, including, but not limited to, state employees,” Ferguson said.

Separately on Thursday, a federal grand jury in Fresno returned an indictment against two women, Sholanda Thomas, 36, and Christina Smith, 37, for mail fraud and identity theft related to filing bogus unemployment claims involving prisoners at the Central California Women’s Facility in Chowchilla. .

Authorities claim that after Smith was recently released, she worked with Thomas, who is still in prison, to file illegal complaints on behalf of other women in the prison. The false statements brought in more than $ 200,000, according to a source close to the investigation. The system was uncovered through examination of recorded phone calls between the women.

Prosecutors allege Smith used some of his proceeds to pay for plastic surgery and kept Thomas’ share in a shoebox pending his release.

In numerous claims, claimants have stated that they are hairdressers or barbers unable to find work. Those familiar with the fraudulent claims from California prisons said both of these jobs were predominant in the applications because they can be difficult for the state agency to verify.

Scott, the US attorney, said other cases were under investigation and federal, state and local agencies were working together on a single task force to streamline those efforts.