EDD pandemic fraud $12.6bil higher than agency estimated, analysis says.

The CEO of a major data and analytics company says that EDD’s $20 billion fraud figure is woefully short of the mark.

In the fall of 2021, during an oversight hearing of California’s Employment Development Department, or EDD, the department was asked by Asm. Cottie Petrie-Norris whether the department had a new estimated amount of money the state had paid out in fraud.

“Of the $170 billion that was paid out, $20 billion is estimated to be fraudulent,” then-EDD-director Rita Saenz said via Zoom.


Multiple requests for updated figures have been met with silence in terms of new fraud figures.

Now, the CEO of a major data and analytics company says that the $20 billion figure is woefully short of the mark.

On Monday morning, we interviewed Haywood Talcove, the CEO of Lexis Nexis Risk Solutions Government Division. He had checked the “dark web” for examples of fraud against EDD. He opened a laptop, pulled up a video file and hit play. The video showed a computer screen with an EDD login page along with a phone dialed to EDD’s customer line.

“You should get your card in three to five business days,” the woman on the phone says.

He said he did the math, using the money California paid out, the fraud rates EDD estimated, and the figures EDD reported to the U.S. Department of Labor and came up with a better estimate.

“EDD spent $177 billion during the pandemic,” Talcove said. “I would bet any amount of money I have, that their fraud rate is much closer to $32.6 billion, not the $20 billion that they’ve been talking about. They’re not just targeting the unemployment insurance system anymore. They are in all your systems, they’re using the same techniques.”

“Seventy percent of that money left California. It left this country,” Talcove said. “It went to transnational criminal groups that have used that money for nefarious purposes to harm our democracy. Some of that money has been used in sex trafficking, child extortion. I’ve been actively involved with the National Center for Missing and Exploited Children. And we saw a huge uptick in child trafficking during the pandemic.”

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