Another wave of fraud: Many Californians in limbo as EDD freezes disability accounts
California's Employment Development Department suspended 345,000 disability claims as it was hit with yet another wave of fraud and identity theft. While working to overcome the challenges that come with a disability, the matter is leaving thousands of people in dire financial straits.
"On top of being emotionally and physically drained from my surgeries, now I'm anxious over the fact that we're not getting paid, so that's been extremely hard," Karen Rickard said.
Karen and her husband Tom have been spending a lot of time tucked away at home in the town of Volcano.
"How have these last few months been for you?" asked KCRA 3 Investigates' Brittany Johnson.
"Hell, to be honest," Rickard said. "It's been an emotional roller coaster."
In September 2021 Rickard said she had emergency hernia surgery. There were complications, and in the process, one of her "bowels was nicked" and she developed an infection.
Rickard said she had to have a second surgery where she received a blood transfusion and had a "pretty significant blood clot" in her leg. While spending about a month in the hospital, Rickard applied for disability insurance through EDD.
According to Rickard, her claim was initially approved and she received her benefits, but all of a sudden the checks stopped coming. Her last check was issued on Dec. 6, 2021.
"I sent four or five emails throughout the next few weeks asking 'what's going on? Why am I not getting paid?' No answer," she said.
Hundreds of KCRA 3 viewers stated similar problems with their disability benefits, that without any warning, they stopped receiving disability payments from the EDD.
"We received two payments, and then all of a sudden, it just stopped," Mike Jacobi of Ripon told KCRA 3.
He said the last check he received from the EDD was on Dec. 14, 2021.
Here's the problem:
In an email to KCRA 3 Investigates, the department said scammers have moved from unemployment fraud to now impersonating doctors in order to dupe California officials into giving them disability checks.
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In response, the EDD suspended 345,000 disability claims in January while they worked to verify the identity of about 27,000 doctors whose credentials were used to file disability claims for purported patients.
The Employment Development Department said most of those suspended claims were likely fraud attempts.
But some of them are legitimate claims from people who can't work because of an injury or are taking paid maternity leave. Now, those people's checks have stopped while state officials try to sort out the mess.
"I work for a health care company," Rickard said. "We do investigate fraud with providers. If we said, 'Well, we've got all this fraud going on, we're just going to cancel everybody's insurance,' it would be all over the place! But we don't do that."
How some have proved they have legitimate claims:
After weeks of calling the EDD, and weeks of driving back and forth to the disability offices in both Sacramento and Stockton, waiting for hours to speak with an employee, Jacobi said he was finally given a specific form to fill out.
According to him, a Stockton EDD employee told him that the form is brand new, and people can only get it in person. He said after he submitted the form his account was reinstated within hours.
However, there are only 15 disability offices in California, which means it can be difficult for people to go in person to get the forms.
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We went to the Sacramento disability office to find the form and it wasn't there. It wasn't on the EDD's website, either.
EDD responds:
KCRA 3 Investigates asked the EDD why the specific form is not at its office locations, and why it's not online.
"I think what you may be missing here is that each claimant has action being taken that can be different from another claimant's situation. Only some of the claimants associated with either medical providers who have been suspended for ID verification or other suspicious activities we have spotted in the system are getting the notice you are asking about. That notice is specific to their claim and not others so we cannot put it up on our website for download or put many more details out there otherwise we risk tipping off fraudsters.
"Our top priority is identifying the real claimants that may have been caught up in scammers using their information or that of their medical providers. To do that we ask that claimants who did receive the form you mention to follow up as requested as soon as possible.
"Other claimants facing a little different circumstance are getting other information and instructions as we go and again, we greatly appreciate their help in following up on that as quickly as possible so we can clearly identify them and reconnect any legitimate claimants with their benefits.
"The thing to remember here is that we believe that most of the claims suspended for further investigation are indeed fraudulent. But for those legitimate claimants who've been caught up in someone using stolen information, we need their help in following up with us as requested over the last few weeks and in the days ahead. That will be critical in helping us zero in on the legitimate claimants and getting their claim cleared. We will continue to provide updates as we go in news releases so stay tuned for further information as it becomes available."
We also asked if we should "send this form out to viewers who email us looking for help."
Here's what we were told via email:
"That document seeks address confirmation — certainly not something all claimants need to do. It would confuse and slow things more for you to broadcast forms to all.
"Bigger picture, EDD continues to pay approximately $150 million in disability insurance claims a week and most folks are not impacted by this scam perpetrated by these greedy fraudsters. We're fixing this by weeding out thousands of fake claims and fraudulent accounts as quickly as possible. Would recommend you tell viewers that most disability claims are not impacted by this. For those who are impacted they should follow the instructions in the personalized communications we send."
While the EDD states most disability claims are not impacted by the scam, we did witness numerous people packed inside of EDD offices, waiting in line outside and sitting in their vehicles, waiting to be called upon by an EDD employee for help.
And for people like Rickard who can't get through to anyone at the EDD over the phone, whose nearest EDD Disability Office is an hour away in both directions and she can't stand in line for hours to hopefully be seen in person due to her surgeries. The question becomes, how does she prove to the EDD that her claim is legitimate?
"What else do I have to do? What do I have to show you? Do you want to see the boom (points to her stomach)? What else do I need to do?" she asked.
Last month, the EDD said of the 27,000 medical provider accounts initially flagged as suspicious, only 485 of them have verified their identity, which means about 98% of them were likely fraudulent, or the medical providers just haven't provided the correct documents.
Following our interview with Rickard, she told us that she obtained the same form that Jacobi received and got her benefits on Wednesday.
Another side to fraud: Identity theft
In addition to people not being able to receive their benefits, there's also another side to the fraud. People who haven't filed for disability are having their identities stolen.
It is the same scam that happened with the EDD unemployment fraud.
KCRA 3 Investigates spoke with Violetta Corral, who is one of those who have had their identity stolen.
Corral said she hasn't filed for disability since she had kids years ago, but she recently got an envelope from the EDD with an official notice stating the agency needed additional information for her disability claim.
"I sat there, and I thought, 'No, I didn't file a disability claim I'm still employed.' But it's a official looking document. It has my name on it, my social security number, my address, the only thing that this document does not have is my birthday, but everything else was legitimate. It has a disability insurance claim number," she said.
Corral said she has already taken steps to try and fix the identity theft by filing fraud reports and freezing her credit.
Here's what EDD suggests people do if they believe their identity has been compromised:
"Scammers remain very aggressive in stealing personal identifying information and using it for all sorts of criminal purposes, including fraudulent benefit claims. As we have stated in numerous news releases, social media, EDD's website and other public correspondence, individuals who receive documents from the EDD but did not file a claim for benefits, or suspect that fraud may have been committed using their identity, are encouraged to visit Report Fraud in Ask EDD. We are able to provide a confirmation number for people reporting online. You can also call the EDD Fraud Hotline at 1-800-229-6297. Identity theft victims may also want to file an identity theft report with the Federal Trade Commission (FTC)."
| WATCH | KCRA 3 Investigates went in-depth and uncovered the depths of record EDD fraud in an hour-long documentary. Click here to watch "Easy Money: Fraud, Fortune & Failures.