The EDD Actively Prosecutes Fraud
The Employment Development Department (EDD) administers the Unemployment Insurance (UI), Disability Insurance (DI), Paid Family Leave (PFL), and Employment Tax programs for the State of California. To support these programs and the payment of benefits, the EDD collects the associated employment payroll taxes.
At the EDD, we are dedicated to detecting, deterring, and preventing any occurrence of fraud in these programs. We use a variety of cutting-edge methods to detect fraudulent activity. We pursue cases involving the fraudulent receipt of benefit payments or evasion of payroll tax reporting obligations and prosecute those responsible to the fullest extent of the law.
The EDD provides fraud deterrence outreach and education to assist claimants, employers, and their representatives so they understand the serious consequences of committing fraud.
Recent Fraud Convictions
Here are current year fraud convictions detected by the EDD and prosecuted to the fullest extent of the law.
- County: Eastern District of California, Sacramento
- Court Case Number: 2:17-CR-0060MCE
- Amount Due to the EDD: $887,199 (total conspiratorial overpayment)
- Claimant: Pamela Emanuel
- Conviction: On 12/10/19 the claimant pleaded guilty to violation of United States Code, Title 18, sections 1341, Mail Fraud, and §1028A (a)(1), Aggravated Identity Theft.
- Sentence: The claimant was sentenced to six years and three months in prison and was ordered to pay $773,733 in restitution.
- Summary of Incident: The claimant was a co-conspirator in an identity theft scheme involving over 250 victims. Charges are pending against other defendants. Between 07/22/15 and 07/14/16, the suspect and four co-defendants perpetrated a scheme to obtain benefit payment debit cards issued in the names of identity theft victims to fraudulently obtain Unemployment Insurance benefits. The conspirators filed 269 false claims attempting to obtain $2.4 million in fraudulent benefits. This case was investigated by the EDD mutually with U.S. Department of Labor, Office of Inspector General, and the Federal Bureau of Investigation.
- Media Release: On 03/20/20, the United States Attorney’s Office, Eastern District of California, issued a media release describing the sentence of Pamela Emanuel.
- County: Los Angeles
- Court Case Number: YA100937
- Amount Due to the EDD: $128,180
- Claimant: Irna Daniels
- Conviction: The claimant pleaded nolo-contendere to one felony count of violating section 2101(a) of the Unemployment Insurance Code.
- Sentence: Sentencing is continued to a future date.
- Summary: The claimant submitted forged medical certifications to obtain Disability Insurance benefits from seven claims. She was also fully employed and failed to report her work and earnings while receiving benefits.
- County: Kern
- Court Case Numbers: BF176611A, BF176611B, BF176611C, and BF176611D
- Amount Due to the EDD: $1,131,764 (including penalties and interest)
- Employer: Gabriel Moreno Gallardo, DBA, Kern County Cultivation, Inc.; South Valley AG Services; and West Valley Farming.
- Conviction: On 01/15/20 Gabriel Moreno Gallardo pleaded guilty to violation of section 182(a)(1) of the Penal Code and sections 2101.5 and 2118.5 of the Unemployment Insurance Code. A Harvey Waiver was stipulated on the remaining counts and allegations. The plea was combined for violations related to the employer’s three business entities represented in each of the EDD investigation cases. All counts for Silvia Esther Gallardo were dismissed.
- Sentence: On 02/21/20 the employer was sentenced to one year in county jail, five years of felony probation, and was ordered to pay $1,131,764 restitution for violations associated with his three employer entities. As a condition of his plea, the employer is not allowed to own or operate any business during the term of his probation.
- Summary of Incident: Gabriel Moreno Gallardo, with the help of family members, continued to open and close accounts with the EDD leaving unpaid tax balances. In order to continue operating without paying the tax liabilities due, each employer registration was opened under a different business and owner name. In some instances, no returns were submitted to the EDD and no liability payments were remitted to the EDD. However, several claimants have collected Unemployment and Disability Insurance benefits against these accounts, including the employer Gabriel Moreno Gallardo and his wife.
- Media Release: On 02/26/20, the Kern County District Attorney’s Office issued a media advisory.
- County: Santa Barbara
- Court Case Number: 1494847
- Amount Due to the EDD: $100,730 (includes penalties and interest)
- Employer: Mark Melchiori, DBA, Melchiori Construction
- Sentence: Based on a felony plea during October 2019 for violations including diversion of construction funds, the employer was sentenced on 02/20/20 to nine years and four months in state prison. The employer was ordered to pay $1,030,708 restitution to his contracting agent and was ordered to pay $1,000,000 restitution pursuant to section 186.11(c) of the Penal Code (“white collar crime enhancement” to freeze assets).
- Summary of Incident: The employer withheld taxes from his employee’s wages, however failed to report the wages and remit payroll taxes to the EDD and other agencies.
- County: Los Angeles
- Court Case Number: VA146125
- Amount Due to the EDD: $9,833
- Claimant: Michael Figueroa
- Conviction: The claimant pleaded nolo-contendere to felony violation of section 2101(a) of the Unemployment Insurance Code.
- Sentence: The claimant was sentenced to serve one day in the Los Angeles County Jail, to serve three years of probation, and was ordered to pay full restitution, which he has paid.
- Summary: The claimant failed to report his work and earnings while collecting Unemployment Insurance benefits.
- County: Fresno
- Court Case Number: F14905405
- Amount Due to the EDD: $2947 (state tax liability, including penalties and interest)
- Employer: Travis Jay Alexander, DBA, United Guard Service
- Conviction: On 12/05/19, the employer pleaded no contest to one count for violation of section 11880(a) of the Insurance Code and one count for violation of section 2106, of the Unemployment Insurance Code.
- Sentence: On 02/04/20, the employer was sentenced to one year in county jail, and 275 days to be served on electronic monitoring, plus five years of formal probation upon release from custody. Restitution was ordered for the amount due to the EDD plus additional amounts owed to the State Compensation Insurance Fund and to former employees for unpaid wages.
- Summary of Incident: The EDD received information alleging that employees of United Guard Service were being paid in cash and that tax deductions from their pay were not remitted to the EDD.
- County: US District Court – Central District of California
- Court Case Number: 8:19-00094-AG
- Amount Due to the EDD: $586,000
- Claimant: Jeffrey Silhanek
- Conviction: The claimant pleaded guilty to two counts for violation of United States Code, Title 18, section 1341 – Mail Fraud
- Sentence: The claimant was sentenced to 18 months in prison and three years of supervised release. During sentencing, the claimant provided a check in the amount of $40,000 to be applied towards his restitution.
- Summary of Incident: The claimant filed Unemployment Insurance claims using stolen identities of approximately 250 individuals. The claimant controlled the mailing addresses to which the benefit checks were mailed and also received payments through direct deposit from EDD debit cards.
- County: Calaveras
- Court Case Number: 18F7290
- Amount Due to the EDD: $27,028
- Employer: Christopher Rinauro, DBA, Proper Pruning Service
- Conviction: The employer pleaded no contest to two misdemeanor counts for violation of sections 2101 and 2106 of the Unemployment Insurance Code for payroll tax fraud and two misdemeanor counts for violation of section 11880 of the Insurance Code for Workers’ Compensation Insurance fraud.
- Sentence: The employer was sentenced to three years of probation, ordered to perform 120 hours of community service, and to pay restitution of an amount to be determined during a restitution hearing scheduled on a future date.
- Summary of Incident: The employer operated a tree trimming business. Investigation revealed the employer intentionally failed to report all his employee wages to the EDD and knowingly made a false statement to the State Compensation Insurance Fund for the purpose of reducing the cost of his Workers’ Compensation Insurance.
- County: Placer
- Court Case Number: 62-165091
- Amount Due to the EDD: $11,163
- Subject: Angela Washington
- Conviction: The claimant pleaded no contest to felony violation of section 487(a) of the Penal Code.
- Sentence: Sentence is scheduled on a future date.
- Summary of Incident: The claimant was employed and failed to report her work and earnings while receiving Unemployment Insurance benefits.
- County: Los Angeles
- Court Case Number: BA459168
- Amount Due to the EDD: $66,111
- Claimant: Cupid Hall
- Conviction: The defendant pleaded guilty to felony violation of section 2101(a) of the Unemployment Insurance Code.
- Sentence: The defendant was ordered to pay full restitution to the EDD, to serve three years of formal probation, to perform 100 hours of community service, and 364 days of electronic monitoring.
- Summary of Incident: The defendant was employed by a doctor whose signature she forged to authorize seven Disability Insurance claims for five individuals from whom she received cash payments.