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'It's very embarrassing' | Lawmakers fear estimated $20 billion stolen from EDD, will never be recovered

Lawmakers on the Accountability Committee fear the majority of the money won't be seen again, but have hope on reform.

SAN DIEGO — The Department of Justice arrested a person on Wednesday for stealing $145,000 worth of unemployment claims during the pandemic.

The suspect used the identities of convicted killers Scott Peterson and Cary Stayner to file her claims.

NPR reported that in the past, people have used the names “Mr. Poopy Pants” or "John Doe" to successfully get money. The AP said criminals also used the identity of California Senator Diane Feinstein.

“Honestly, when we think about the good that $30 billion could have done for California and struggling in the midst of that pandemic, it makes me especially furious," said Democrat Assemblymember, Cottie Petrie Norris, who chairs the Accountability Committee.

Every time she hears a story about how someone could file with a name like, "Mr. Poopy Pants” or use the identity of a serial killer, she's furious.

“As an assemblymember, as a citizen of California, as a taxpayer, I am absolutely outraged,” she said.

Republican Assemblymember Tom Lackey sits on the committee too.

“It's very embarrassing," Lackey said. "And what happens is, when we have these kinds of failures, people lose their confidence in their government,”

It’s a bipartisan effort to make sure it never happens again.

“So far, it's over, it's about $1.1 billion, that EDD has reported that they have been able to recover from a variety of investigations. That really is just a drop in the bucket of the money that was that was stolen. And investigations are ongoing. They continue, really at every level of law enforcement.”

Petrie Norris and Lackey believe $30 billion is a more appropriate estimate for what was stolen.

But the Employment Development Department (EDD) says the official number is still $20 billion.

What is the likelihood the state gets back the other $19 of the $20 billion?

Lackey responded: “These aren't just your local person that's uneducated, and desperate for funds. These are people that are very, very bright. These are white collar criminals, and they know how to recover their tracks. And that makes recovery very, very difficult.”

Petrie Norris responded: “I think that the amount of money that has been lost, and it is irrecoverable is, again, as I said, something that makes me and I think make all of us feel really, sick to our stomachs. We know that it's everyone from international players to organized crime to you know, these countless individual fraud cases where people were just making up names,”

But based off the most recent oversight hearing, Petrie Norris is feeling hopeful about the future.

“I feel encouraged by the steps that have been taken to upgrade systems technology update operations, to ensure that we will be able to prevent fraud in the future,” said Petrie Norris.

Political reporter Morgan Rynor reached out to the AG’s office and the EDD to see if someone was available to talk on Thursday, about how they’re going about trying to get the money back.

The immediate impact on people was that it became incredibly difficult for legitimate people to get assistance when they needed it.

But Petrie Norris said if there’s a silver lining, it’s this: $19 of the $2 billion stolen was federal money. Not state money.

So, she said California employers should not be seeing increased insurance rates.

WATCH RELATED: EDD, responsible for $20 billion paid out fraudulent claims, making progress to improve department (September 2022)

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