Record $25 million claimed in jobless scam, authorities say

An unemployment scam operated out of California prisons sought a record $25 million from the state and U.S. governments, netting more than $5 million that went for vehicles, furniture, handbags and jewelry, federal authorities said Friday.

The $25 million is the largest known single intended haul in California, said former U.S. attorney McGregor Scott, who is working with the state Employment Development Department to coordinate investigations into fraud related to pandemic relief.

Yet it and the $5-million actual loss remain a fraction of the more than $20 billion in unemployment benefits that authorities believe has been stolen since March 2020 as the state approved fraudulent payments in the names of death row inmates and even U.S. Sen. Dianne Feinstein (D-Calif.).

Inmates Daryol Richmond, 31, and Telvin Breaux, 30, both from Los Angeles County, falsely claimed that they and others, including minor children, had been selling clothing or working as handymen, mechanics or in other jobs until they became unemployed because of the COVID-19 pandemic, a new indictment alleges.

Richmond is imprisoned at Kern Valley State Prison in Delano, serving a nearly 25-year sentence as a repeat offender for robbery and attempted robbery with various enhancements, according to corrections officials.

Breaux is in the California Correctional Institution in Tehachapi, serving five years for robbery with a firearm, among other offenses.

They used contraband cellphones, emails and telephone calls from prison to communicate with others outside the prisons, investigators say.

The new indictment charges them along with six Southern California residents with conspiracy to commit mail fraud and aggravated identity theft, charges that carry a maximum penalty of 20 years in federal prison and a $250,000 fine.

They are alleged to have created bogus email accounts and used different street addresses across Southern California to file more than 400 fake claims.

Once they were mailed debit cards for their relief claims, investigators said the suspects withdrew the cash at different locations, on different days and times, and in varying amounts in a bid to escape authorities’ notice.

Richmond has negotiated a plea agreement that calls for him to plead guilty but pay restitution not to exceed $382,000. It calls for an additional sentence of about four years in prison.

Breaux’s attorney, Austin Dove, did not respond to telephone and email requests for comment Friday evening.