Ten people, including convicted murderers, have been charged in separate schemes that defrauded California’s employment agency out of hundreds of thousands of dollars, prosecutors announced Monday.
The defendants intended to bilk the state Employment Development Department out of taxpayer dollars meant for struggling Californians hit hardest by coronavirus-related closures and business restrictions, according to a news release from the Orange County District Attorney’s office.
They were involved in “three separate and unrelated complex schemes,” the release read.
Among those charged: two business owners who allegedly set up a fake storefront in Garden Grove for the purpose of collecting unemployment in one scheme, as well as eight people — including six state prisoners — involved in two other schemes, according to prosecutors.
The DA’s Office said the agency launched its investigation last November after receiving a tip that a business in Garden Grove had been advertising assistance to those applying for the Pandemic Unemployment Assistance program. The PUA is part of federal help for workers who normally wouldn’t qualify for unemployment, such as independent contractors and the self-employed.
The business — Nguyen Social Services, LLC, located at 9840 Garden Grove Blvd. — was set up by Huy Duc Nguyen, 32, and Mai Dacsom Nguyen, 40, both of Garden Grove, according to the release.
They allegedly advertised the scheme in Vietnamese to bring in business and get people to file false claims on their behalf, which would earn them a kickback fee of up to $700,000.
Investigators believe the business filed more than 1,000 fraudulent applications on behalf of people who didn’t qualify for PUA benefits, according to the release.
Among the claims were one from a 99-year-old woman who said on her application that the pandemic cost her work as a housekeeper. But according to prosecutors, she hadn’t even worked for several decades.
After serving a search warrant on the storefront last month, investigators seized $490,000 in cash believed to be linked to EDD fraud, including money in frozen bank accounts tied to the business, according to the DA’s office.
Mai Nguyen has been charged with four felony counts apiece of perjury and false statement, and one felony count of conspiracy to defraud another of property.
Huy Nguyen was charged with one felony count each of perjury, false statement and conspiracy to defraud another of property.
More charges are possible against the pair as the investigation continues, according to the DA’s office. They’re both scheduled to be arraigned on March 19.
In another scheme, an Anaheim tax preparer is accused of conspiring with four prisoners, including two convicted murders, to file fraudulent unemployment claims.
The two convicted murderers “claimed the COVID-19 pandemic had impacted their ability to work when in reality it was the fact that they are serving sentences up to life in prison that prevented them from being gainfully employed,” the DA’s release stated.
One of the claims 35-year-old Sandra Pineda allegedly filed was on behalf of 30-year-old Leonel Hernandez, who has been incarcerated in Kern Valley State Prison for a decade.
In the application, she stated that Hernandez had worked 40 hours a week in the last 18 months, with an income of $45,263, but that he was forced to stop working due to the pandemic.
Pineda is further suspected of conspiring to file false unemployment applications with three other inmates, including 29-year-old Greg Garcia, 36-year-old Ryan Vargas and 31-year-old Hector Jimenez.
She was arrested on Jan. 14 and charged with 11 felonies, including five counts each of perjury and making a false statement.
Her arraignment is scheduled for April 14.
Garcia, Hernandez, Vargas, and Jimenez were also charged with one felony count of filing a false statement and another felony count of conspiracy to commit theft by false pretenses.
In the third case, a 35-year-old Irvine woman is accused of plotting with two inmates, one of them her brother, to cheat the EDD out of at least $50,000.
Rosalva Bahena — a convicted carjacker who was out on parole — allegedly aided her brother, 44-year-old Bruno Galindo, and another prisoner Guillermo Rodriguez, prosecutors said.
The trio are suspected of filling out fraudulent unemployment applications using information from the California Department of Corrections and Rehabilitation, which was then processed through the EDD.
Bahena then allegedly used EDD debit cards to withdraw money on a weekly basis.
She was arrested on Jan. 14 and pleaded not guilty to charges including perjury, filing a false statement and money laundering derived from criminal activity.
Galindo has been charged with three felony counts of filing a false statement, three felony counts of money laundering derived from criminal activity and a felony count of conspiracy to commit theft by false pretenses.
Rodriguez was charged with two felony counts, one each of filing a false statement and conspiracy to commit theft by false pretenses.
“These investigations are not the end; they merely scratch the surface of the depth of unemployment fraud in the state of California,” DA Todd Spitzer said in the release. “All my fraud investigative resources have been dedicated to EDD fraud over the last few months, leaving no resources for our regular fraud cases. It is simply not sustainable – and it is not fair to the victims of fraud in Orange County and it is not fair to the taxpayers of the state of California.”
The DA’s office noted that EDD fraud has been an issue statewide during the pandemic; they said a state contractor hired to identify suspected cases found at least 10% of unemployment claims may have been fraudulent prior to restrictions being put in place in October.
That would translate to nearly $10 billion in fraudulent EDD payments between March and September.
Since the start of the pandemic, the employment agency has paid out $113 billion in benefits, including $43 billion from the PUA program, according to the DA’s office.
“This is not an Orange County problem. This is a statewide problem that has cost California taxpayers nearly $10 billion dollars in fake unemployment claims,” Spitzer said. “Money that should have gone to out-of-work hairstylists, waiters, and other out-of-work Californians instead ended up in the pockets of cold-blooded murderers and businessmen who saw an opportunity to make a quick buck and took it – at the expense of taxpayers.”