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Crime

California freezes 345,000 disability claims suspected of fraud

California has already lost $20 billion to fraudulent claims for unemployment insurance, according to the Los Angeles Times

Emergency pandemic funds have been been targeted by fraudsters
Emergency pandemic funds have been been targeted by fraudsters | Shutterstock

January 18, 2022 10:37pm

Updated: January 18, 2022 10:37pm

The state of California froze 345,000 disability insurance claims authorities suspect are fraudulent, according to California’s Employment Development Department (EDD).  

In a statement last week, EDD said that “organized criminal elements” are behind the flood of false disability claims using stolen credentials from doctors and other medical professionals. The department also froze 27,000 suspicious medical provider registrants and requested they submit verification forms to confirm their identities.

"While the majority of these providers and claims were likely fraud attempts, the Department has partnered with state regulators and medical provider organizations to coordinate the verification process to clear any legitimate claims as quickly as possible," the press release read. "This is EDD’s top priority."

California state Senator Richard Pan, who also works as a pediatrician, said it was easy to find all the information one needed to impersonate a doctor online, including their address, phone number, medical school, license number and national provider identifier.

“I think it speaks to the issue of privacy on the internet and the opportunity it gives people who want to scam and try to take over other people’s identity,” Pan told the Los Angeles Times.

Disability insurance assists Americans whose ability to work and earn a living has been affected by a disability, which could result in hardship for legitimate claimants who have been locked out of their benefits.

Emergency state and federal funding to assist those affected by COVID have been a prime target for fraudsters, catching state and local governments flat-footed. California has already lost $20 billion to fraudulent claims for unemployment insurance, according to the Los Angeles Times.

The state is still in the process of reverifying 1.4 million Pandemic Unemployment Assistance claims it froze over suspicions of fraud. EDD’s statement said one in five residents has refiled claims for PUA as of Jan. 13, with 90% being cleared.