On Tuesday, huge numbers of correctional and prison inmates, which include jailed serial killers and notorious prisoners such as Scott Peterson, have held out what investigators defined as potentially the biggest scam scheme in the history of California.

Unemployment relief scam

The alleged scam, which centers on pandemic unemployment benefits, could total as much as $1 billion, Sacramento County District Attorney Anne Marie Schubert had stated.

Schubert, who chairs a task force under the "behemoth" scheme, cautioned: "Hundreds of millions of dollars - that may well amount to upwards of a billion dollars - having already been paid in their names.... It will be one of the biggest fraud of taxpayer dollars in California history."

The scam was described by Schubert as an all-inclusive commitment, involving each facility in the Corrections and Rehabilitation Department of California, along with local, state, and federal organizations.

In a media briefing, Schubert had stated that authorities had been made aware of reports of unlawful unemployment claims being made from penitentiaries under COVID-19 relief schemes whereby they discovered tens of thousands filed on behalf of inmates.

"The fraud is honestly staggering," Schubert had stated.

Between March and August, Schubert mentioned that 35,000 claims bringing the total to $140 million in benefits had been filed by prisoners located in every California prison and jails throughout the state.

Those benefits have been often funded directly to prisoners within the institutions, Schubert added. The funds have been sent to family and friends outside of the jails and prisons in several other instances.

Schubert had blamed the absence of a cross-matching software system from the state, which would identify devices from those in custody. Even when 35 other states have such a system such as this, California, on the other hand, has not.

Scott Peterson's involvement

According to authorities, Scott Peterson has been among the many California prisoners, including several sentenced killers, who have claimed COVID-19 unemployment benefits in the recent months.

Earlier this year, after the state high court determined that there had been "significant errors" throughout jury selection in his sentencing, Peterson's capital punishment was reversed. Prosecutors have announced that they would pursue capital punishment in the case again.

Questioned how many scams existed linked with the claim of Peterson, a different prosecutor with the department of Schubert stated: "We know the number" yet refused to disclose it, noting an ongoing investigation.

On Tuesday, Pat Harris, a lawyer for Peterson, chose not to respond immediately to a request for a statement; however, he told the Associated Press that authorities would discover "that he had not a thing to do with any kind of scheme to get fraudulent benefits."

Moreover, Schubert confirmed claims worth $420,000 had already been issued to prisoners on death row.

She had stated that the scam could've been worked out since California lacks a program that "cross matches" jail and prison information with unemployment claims, unlike 35 neighboring states.

 Deputy director of the State Department of Economic Development, Loree Levy, stated in a comment that it was "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 refused to elaborate on particular allegations, citing provisions for privacy. 

California Gov. Gavin Newsom labeled the scam "absolutely unacceptable" in a comment to NBC Los Angeles and had stated that he had ordered emergency services authorities to establish a task force to help address the issue.


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