EDD fraud schemes: Prison inmates, Roseville woman charged

California

SAN FRANCISCO, Calif. (KRON) – The U.S. Department of Justice has made charges in two COVID-19 unemployment benefit fraud schemes on Thursday.

One case involved Chowchilla prison inmates and the second involved a woman from Roseville.

U.S. Attorney McGregor W. Scott says hundreds of thousands of dollars were stolen from the California Employment Development Department that was meant for those who have been struggling financially throughout the pandemic.

“The U.S. Attorney’s Office is committed to the mission of combatting fraud that abuses the provisions of the CARES Act,” said U.S. Attorney Scott. “We will work with every major law enforcement agency to investigate and prosecute the fraud arising out of the pandemic. This theft of taxpayer dollars intended to assist our citizens in a very difficult economic time simply will not be tolerated.”

On Thursday, a Fresno federal grand jury charged inmate Sholanda Thomas, 36, and parolee Christina Smith, 37. for conducting a prison-based scheme out of Central California Women’s Facility in Chowchilla.

According to court documents, they ‘were indicted for conspiracy to commit mail fraud and aggravated identity theft charges for the submission of several fraudulent EDD unemployment insurance claims in Thomas’ and other CCWF inmates’ names.’

Through recorded jail calls and emails, officials were able to show that the two were able to get names, date of birth, and social security numbers for other CCWF inmates which were submitted for debit cards.

The false claims described the inmates as hairstylists or barbers, along with other job titles.

This scheme resulted in a $200,000 loss for the EDD and United States.

Andrea M. Gervais, 43, was involved in the second fraudulent scheme.

Gervais was a former employee for the EDD and is accused of a mail scheme with about ‘100 fraudulent Pandemic Unemployment Assistance (PUA) claims in the names of persons other than Gervais.’

The criminal complaint states that at least 12 of those claims were processed leading to Gervais receiving over $200,000 in unemployment benefits.

The documents state, ‘the total value of all fraudulent PUA claims from her residence was at least $2 million.’

On Tuesday, Gervais was arrested on federal complaint. She was released on bond as she awaits further proceedings.

Thomas and Smith will face 20 years in prison for conspiracy to commit mail fraud and two additional years for identity theft, if convicted.

Gervais will face 20 years in prison for mail fraud, if convicted.

They will also have a maximum fine of $250,000 for each county.

“Today’s announcement reflects our collaborative commitment to work together across all levels of government and highlights that joint cooperation and a “one team, one fight” approach are already paying dividends,” said Mark S. Ghilarducci, Director, California Governor’s Office of Emergency Services and California’s Homeland Security Advisor. “Going forward, this State Coordination Task Force will remain laser focused on continuing to augment and coordinate with our partners at the US Attorney’s Office, with the district attorney’s offices and with our other state, local and federal law enforcement agencies, to continue to root out criminal activity and the fraud that has occurred within the unemployment system and ultimately hold those responsible accountable.”

“The EDD is committed to combatting the aggressive fraud attacks against the unemployment benefit system and is grateful for the collaborative efforts of federal, state and local partners in this shared goal,” said Nancy Farias, EDD’s Chief Deputy Director of External Affairs, Legislation, and Policy. “EDD has enhanced its fraud detection and prevention tools to ensure only valid claimants receive timely benefits. We will work with law enforcement to hold those accountable who seek to defraud the unemployment system.”

To read the full court document, click here.

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