One-Time EDD Employee Sentenced to More Than 5 Years in Prison for Fraudulently Obtaining Nearly $4.3 Million in COVID Relief Funds
From the U.S. Attorney’s Office, Central District of California:
RIVERSIDE, California – A former California Employment Development Department (EDD) employee was sentenced today to 63 months in federal prison for causing nearly 200 fraudulent COVID-related unemployment relief claims to be filed in other people’s names, resulting in nearly $4.3 million in ill-gotten gains.
Gabriela Llerenas, a.k.a. “Maria G. Sandoval,” 44, of Perris, was sentenced by United States District Judge John W. Holcomb, who also ordered her to pay $4,298,093 in restitution.
Llerenas took advantage of the expanded eligibility for unemployment insurance (UI) benefits made possible by the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress and signed into law in March 2020. The CARES Act provided additional UI benefits to qualified individuals and helped provide UI benefits during the COVID-19 pandemic to people who did not otherwise qualify, including business owners, self-employed workers, independent contractors, and those with a limited work history.
From April to October 2020, Llerenas filed and caused the filing with EDD of fraudulent unemployment insurance benefits that falsely asserted the named claimants were self-employed independent contractors – often identifying them as cake decorators or event attendants – who were negatively affected by the COVID-19 pandemic. Llerenas obtained some of the names, Social Security numbers and other identifying information she used to submit the fraudulent claims through her prior work as a tax preparer.
Llerenas also falsely stated on some of the applications that the claimants were residents of California entitled to unemployment insurance benefits administered by EDD when in fact they lived elsewhere. On some applications, she inflated the amounts of income she reported for the claimant to maximize the benefit amount. She also filed a dozen or more fraudulent EDD claims in a day.
As a result of the fraudulent unemployment benefits applications that Llerenas filed and caused to be filed, EDD authorized Bank of America to mail debit cards in the names of the claimants to addresses she provided, including her residence, her husband’s business location, her mother’s apartment and the addresses of friends and other family members.
Llerenas charged the named claimants a fee for filling the applications, which was often paid out of the fraudulently obtained benefits. In at least one case, she told the named claimant that she was still employed at EDD and could control the distribution of the unemployment insurance benefits, and then demanded an additional payment for “releasing” the benefits.
In total, 197 debit cards were fraudulently issued because of this scheme. Judge Holcomb found that the resulting losses to EDD and the United States Treasury that Llerenas caused totaled $4,298,093.
As part of the investigation, $621,124 in cash was seized from Llerenas and has been forfeited.
The Department of Labor-Office of Inspector General, EDD-Investigations Division, Homeland Security Investigations, United States Postal Inspection Service, FBI and Social Security Administration-Office of Inspector General investigated this matter.
Assistant United States Attorney Ranee A. Katzenstein, Chief of the Major Frauds Section, prosecuted this case.