Unemployment insurance fraud in California, known as “EDD fraud,” occurs when someone submits false or incomplete information in order to secure unemployment benefits they are not entitled to receive.
This common white collar crime is defined under California Unemployment Insurance Code 2101 which says insurance fraud occurs when anybody makes a:
- “willful false representation, knowingly concealing, or the false identification in order to obtain, increase, reduce, or defeat any benefit under the state or federal programs.”
EDD fraud can also occur by an employer if they provide false information in order for their former employee to be denied benefits they are entitled to receive.
Since the beginning of the COVID-19 pandemic, the state of California has experienced a huge increase in unemployment insurance fraud cases.
The unemployment insurance program is designed to help people who lost their job by providing some financial relief until they can find other employment, but not everyone is eligible.
This program is operated by the California Employment Development Department, commonly known as the EDD.
This crime normally occurs when somebody provides false information, conceals material facts, or gives a fake identification with intent to receive unemployment benefits. Our Los Angeles criminal defense attorneys will review the law below.
Common Examples of Unemployment Insurance Fraud
As stated, an unemployment insurance fraud crime occurs when somebody gives false information in a deliberate attempt to conceal information, or they give fake identification to receive California unemployment benefits.
There are numerous examples on how someone can commit unemployment insurance fraud, including the following:
- working while receiving unemployment compensation (double-dipping);
- not seeking a new job, but claiming you are on the form;
- use of false identification to receive benefits;
- failing to report you receive workers' compensation;
- attempt to receive benefits from another state
- give false information on the reasons you are unemployed;
- create fictions employer and then list yourself eligible for benefits;
As noted, employers also violate California's unemployment insurance fraud laws. When they give the EDD false information on why an employee was terminated, or amount of their wages, with intent not to pay unemployment insurance compensation.
What are the Penalties for EDD Fraud?
A violation of Unemployment Insurance Code 2101 is a “wobbler” that can be charged as either a misdemeanor or felony crime.
A misdemeanor conviction carries up to one year in the county jail and a $1,000 fine.
If convicted of a felony case of unemployment insurance fraud, it's punishable by 16 months, 2 or 3 years in a California state prison, and a fine up to $20,000.
California Penal Code 550 is the general insurance fraud statute and the penalties will depend on the amount of loss.
A felony conviction for PC 550 carries 2, 3, or 5-year jail sentence, and a fine up $50,000, or double the amount of fraud.
Related California crimes
Penal Code 470 PC – forgery,
Penal Code 487 PC – grand theft,
Penal Code 118 PC – perjury,
Penal Code 182 PC – conspiracy.
What are the Defenses for EDD Fraud?
In some cases, your criminal defense lawyer might be able to negotiate a deal where you make an arrangement to pay restitution to the California EDD if they will agree to not file criminal charges against you.
If restitution to avoid charges is not an option, there are other common defenses to fight charged of unemployment insurance fraud.
No fraudulent intent
The prosecutor has the burden to prove, beyond any reasonable doubt, you willfully presented false information with intent to defraud in order to unlawfully receive benefits.
We might be able to argue you had a reasonable belief you submitted a legitimate unemployment insurance claim, or you accidentally gave EDD incorrect information.
Negotiating a plea bargain
In some cases, prosecutors have sufficient evidence to obtain a conviction for unemployment insurance fraud. In other words, your guilt is not in doubt.
In this situation, our criminal defense attorneys could make an attempt to negotiate a favorable plea bargain with prosecutor.
Plea bargains can minimize liability in exchange for a “guilty” or “no contest” plea, for which the prosecutor will agree to a reduced criminal charge and sentence.
Developing a Defense Strategy
When it comes to messing around with the government and their funds, they tend to react very harshly if they believe you're involved in causing significant loss as it relates to the EDD.
So, if you're charged or are being investigated for some sort of EDD fraud and you're accused of taking money that you shouldn't have taken, you need to get a defense attorney right away.
Having this type of conviction on your record and suffering the consequences of this type of conviction can be severe.
You could be facing prison time. You could be facing loss of significant rights and your future is in jeopardy. You've come to the right place. I've handled hundreds of EDD fraud cases. I have great results.
It really just depends on the circumstances of your case, how much money you're accused of taking, whether or not you have a defense in the case or is it the type of case where we're going to mitigate things and try to get you the best result both as a charge and as a punishment.
Seeking Best Possible Outcome for EDD Fraud
What I need you to do is pick up the phone and ask for a meeting with Ronald Hedding. Also, I need you to be honest with me when we meet because if I don't have all the facts, I can't get you the best result.
If you only tell parts of the story and leave out other parts of the story, you're not going to have a successful defense. Your defense attorney needs to have all of the information, especially when you're talking about EDD fraud in Los Angeles because a lot of times these cases are investigated pretty thoroughly.
The federal government and even the state government, move at a slow pace. They've got a lot of things going on but they have a step-by-step process that they use.
They will order bank records. They will investigate the person with a private investigator. They will do all sorts of things before they make their move and arrest you.
So, if you know you're under investigation, you're going to need an attorney and that you've done something wrong and if you know that you have a court date pending because you were arrested and had to post a bail.
The first thing we're going to do is sit down and go over everything and make sure that we have the right strategy moving forward.
We want our strategy in place as fast as we can get it in place because when it comes to EDD fraud, things can move very quickly, rights can be taken away from you, assets can be frozen — all sorts of things that can happen that obviously you don't want to happen and you need to be prepared for.
When you mess with the federal government, it's like messing with the mafia. They come in force. They've got unlimited funds, unlimited investigation and unlimited power.
So, if you want to counter that — if you want to be ready for that and want to protect your rights and your future, you've got to have an attorney who's used to dealing with those type of authorities.
We will get the game plan together that makes sense for you, your rights, your freedom and your future.
Hedding Law Firm is located at 16000 Ventura Blvd #1208 Encino, CA 91436. We offer a free consultation at (213) 542-0979.