Coronavirus fraud: Millions of dollars paid to California prisoners in COVID-19 scam

California prisoners including high-profile serial killers and murderers on death row received hundreds of millions of dollars in pandemic relief funds in one of the biggest frauds in the US state’s history, prosecutors said Tuesday.

Investigators alerted to reports of illegal unemployment claims made from prisons under Covid-19 relief schemes discovered tens of thousands filed in the name of inmates, Sacramento County district attorney Anne Marie Schubert told a press conference.

“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,” warned Schubert, who is chairing a taskforce into the “behemoth” scheme.

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A confirmed figure of $140 million already paid to 20,000 inmates is merely a “snapshot” based on state prison data for March to August, with the true cost of the fraud potentially many times higher.

More than $420,000 alone was paid to some 130 death row inmates, including notorious serial killer Wayne Ford, who murdered four women before handing himself in to a California sheriff’s office in 1998 with a severed breast in his pocket.

Scott Peterson, convicted of killing his pregnant wife and unborn son, and “Yosemite Killer” Cary Stayner also received payments.

“Quite frankly, the inmates are mocking us,” added Schubert, who sent a letter to Governor Gavin Newsom on Monday co-signed by nine district attorneys.

Many of the claims used prisoners’ real names, addresses and social security numbers to obtain debit cards sent to homes across California and other US states under pandemic unemployment relief schemes.

Scott Peterson is escorted by two San Mateo County Sheriff deputies as he is walked from the jail to a waiting van in Redwood City, California, March 17, 2015. (AP)

No cross checks

The fraud was possible because, unlike other states, California did not cross-check lists of inmates against unemployment claims made for lost income since the coronavirus lockdown began in March, Schubert said.

A newly formed California taskforce carried out a partial cross-check within the last month, and found payments had been sent to “rapists and child molesters, human traffickers and other violent criminals in our state prisons.”

Highlighting further dysfunction in California’s Employment Development Department under the pandemic relief scheme, other fraudulent claims had been made under fake names including “John Doe” and “Poopy Britches,” Schubert said.

Newsom responded with a statement later Tuesday calling the fraud “absolutely unacceptable” and pledging to “direct as many resources as needed to investigate and resolve this issue speedily.”

Vern Pierson, president of the California District Attorneys Association, told Tuesday’s press conference that the fraud is taking place in “essentially every [prison] institution.”

“It is open and notorious within the correctional facilities, being discussed about how ‘everybody’s getting paid and we need to get ours,’ things along those lines.”

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