OC EDD Fraud: Garden Grove Storefront Created In 1 Case, Convicted Murderers Recruited To File Bogus Claims In 2 Others
SANTA ANA (CBSLA) — Ten people, including two convicted murders and four other California state prisoners, have been charged in fraudulent unemployment claim schemes that netted nearly half a million in cash, according to Orange County District Attorney Todd Spitzer.
"This is just the tip of the iceberg," Spitzer said. "There was a human need for this money, a real human need, and instead this money went to six state prisoners including two convicted murderers."
The prisoners were charged along with two business owners accused of opening a Garden Grove storefront for the purpose of filing false unemployment claims for people who did not qualify.
Spitzer said that he was beyond disturbed to see opportunists and profiteers take advantage of the unemployment system meant to help people navigate the pandemic.
"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 murders and businessmen who saw an opportunity to make a quick buck and took it – at the expense of taxpayers," he said in a statement. "These investigations are not the end; they merely scratch the surface of the depth of unemployment fraud in the state of California."
One case was filed against 32-year-old Huy Duc Nguyen and 40-year-old Mai Dacsom Nguyen, both of Garden Grove, for allegedly forming Nguyen Social Services for the sole purpose of filing false unemployment claims. They are accused of advertising the scheme in Vietnamese, then filing applications on behalf of people who did not qualify and collecting a kickback fee between $200 and $700. They were both arrested on Dec. 17, when investigators searched their business, at 9840 Garden Grove Blvd., and other locations related too the business. More than $300,000 in cash was seized during the search and the business' bank accounts were frozen. Prosecutors say they seized an approximate total of $490,000 suspected of being related to EDD fraud.
Another case was filed against Anaheim tax preparer, 35-year-old Sandra Pineda of Anaheim, for allegedly conspiring with four state prisoners – including two convicted murderers – to file false EDD applications. Prosecutors say Pineda claimed in an application that 30-year-old Leonel Hernandez had been working 40 hours a week and had an income of $45,263, but that COVID-19 "severely limited his ability" to work – even though he has been incarcerated in Kern Valley State Prison for more than 10 years. Pineda, who was arrested on Jan. 14, allegedly also submitted claims for third-strikers Hector Jimenez and Ryan Vargas, and Greg Garcia, who is incarcerated in Corcoran.
Rosalva Bahena, 35, of Irvine, has been charged with conspiring with her brother, Bruno Galindo, to file fraudulent EDD applications using inmate information. Galindo, who is serving 44 years to life in High Desert State Prison for attempted murder and gang charges, and his fellow prisoner, a convicted murder serving 110 years to life, allegedly worked with Bahena to file false claims and defraud the EDD of about $50,000. Bahena was arrested on Jan. 14.
Assemblywoman Cottie Petrie Norris, who is chairwoman of the Assembly Accountability & Administrative Review, says she will question the EDD director about the fraud that has crippled the state's unemployment system.
"These latest Orange County EDD fraud cases are incredible, and we know this is just the tip of the iceberg," she said in a statement.
As for the victims of suspected fraud, many are still getting 1099 tax forms for money many have not been able to receive from frozen accounts.
EDD said in a statement that anyone who suspects they have been taxed on money they have not received as a result of fraud should call the department.
"If an individual receives a Form 1099G, but did not file a claim for benefits and thinks someone else may have filed a claim under their name or Social Security number, visit Fraud and Penalties: What You Need to Know to learn how to report fraud and find information on protecting yourself from identity theft. In addition, the EDD has increased staff in our contact center for this annual process from 27 to more than 300 to answer questions and help resolve issues. Individuals can call 1-866-401-2849 if they need Form 1099G assistance. Claims identified as imposter fraud will be removed from the Social Security number and an amended 1099G will be provided."