Indictment says Bank of America contractor helped steal millions from California EDD debit cards
A federal grand jury has charged 10 Arkansas residents with stealing millions of dollars from California Department of Employment Development debit cards issued by Bank of America.
The indictment says a Bank of America contractor was inside, helping cohorts cash in fake EDD debit cards — and get away with $2.7 million. This incident shows the long arm of EDD fraud – this time, authorities say, from Arkansas.
RELATED: Californians with Disabilities Ask EDD to Unlock Their Benefits After 340,000 Accounts Are Freezed
Previously, Bank of America detected fraud and froze thousands of EDD debit cards in an attempt to stop it. In the process, many legitimate workers were cut off from their unemployment benefits.
Diane Davis and Michael Conant saw hackers drain their EDD debit cards.
“You took $16,000 from the account. Where did he go ? Conant asked.
“$7,000 was taken out of my account. It hurts,” Davis said.
Bank of America denied their claims and froze their accounts, along with thousands of others.
RELATED: Unemployed workers who didn’t get a big tax break in 2020 may soon get it
“We believe that the overwhelming majority of frozen accounts represent fraud that has been caught, representing hundreds of millions or billions of criminal activity,” Bank of America executive Faiz Ahmad said during an explanation to reporters. state lawmakers last year when asked why the bank froze everything. these accounts.
A federal judge then ordered Bank of America to reopen those cases and restore the legitimate claims.
Now, the latest attempt to untangle California’s fraud fiasco has landed in the lap of a federal grand jury — in Arkansas.
“What we will find out as the case unfolds is what happened, how it happened and why…” Assemblyman Jim Patterson said. (R-Fresno).
The Little Rock grand jury indicted 10 Arkansas residents for cashing in California EDD debit cards.
The indictment names former Bank of America entrepreneur Madison Clark of Little Rock, a customer service agent serving EDD cardholders.
RELATED: CA EDD slashes benefits for new moms as it investigates massive disability fraud
It says Clark used his position and “accessed Bank of America’s systems without authorization to reissue debit cards, remove fraud blocks, and add credits to unemployment accounts.”
The US attorney’s office said the other defendants then used the debit cards to withdraw $2.7 million.
A defendant was on bail facing a murder charge when authorities said he joined the plot.
The U.S. attorney’s office said Bank of America discovered the violation last year and fired the contract worker.
RELATED: EXCLUSIVE: BofA says it wants out of unemployment benefits contract as EDD renews
“It worried me from the start,” Assm said. said Patterson.
Assm. Patterson pushed for an investigation into potential insider fraud at numerous state agencies, including EDD.
“This is going to be a big, important lesson. I hope EDD and Bank of America learn, so they’re not vulnerable in the future,” Assm said. said Patterson.
The $2.7 million loss is a tiny fraction of California’s unemployment fraud. EDD estimates it gave $19 billion to fraudsters in bogus unemployment claims. Bank of America says it has lost at least $200 million to debit card fraud – and says it wants out of the EDD business.
RELATED: Judge Says Bank of America May Have Illegally Denied EDD Fraud Allegations
A class action lawsuit on behalf of thousands of EDD debit card holders is still pending in Southern California. Last year, a federal judge ordered Bank of America to reopen refund claims for unauthorized transactions. The bank had automatically closed thousands as it tried to stop the fraud.
Copyright © 2022 KGO-TV. All rights reserved.