A former employee of the California Employment Development Department (EDD) and her ex-boyfriend have been sentenced to federal prison for their involvement in a scheme to fraudulently obtain COVID-19 jobless benefits. Phyllis Hope Stitt, 61, from Carson, was sentenced to 20 months by United States District Judge André Birotte Jr. She was also ordered to pay $768,958 in restitution.
Kenneth Earl Riley, 64, of South Los Angeles, received the same sentence of 20 months and was instructed to pay $611,458 in restitution.
Stitt had worked as an employment program representative at EDD during the pandemic. Her role involved assessing claimant eligibility for unemployment insurance benefits and processing claims. From March 2020 to September 2021, Stitt used her access at EDD to acquire personal information from victims which she then used to submit fraudulent claims without their knowledge or consent.
Stitt manipulated these applications by backdating them to increase the benefit amounts. The fraudulent applications falsely stated that victims were unemployed due to the pandemic and actively seeking work when many were not eligible for such benefits.
Riley played a role by using mailing addresses accessible to him for receiving debit cards and accounts set up through these fraudulent applications. He then made cash withdrawals and purchases with the funds obtained through this fraud.
In response to increasing fraud during the pandemic, on May 17, 2021, a COVID-19 Fraud Enforcement Task Force was established by the Attorney General. This task force is designed to enhance efforts against pandemic-related fraud by coordinating resources across government agencies.
On September 15, 2022, it was announced that U.S. Attorney’s Offices for California's Central and Eastern Districts would lead one of three national COVID-19 Fraud Strike Force Teams focused on large-scale financial fraud related to pandemic relief efforts.
This case was investigated by several agencies including the United States Department of Labor Office of Inspector General, FBI, and California Employment Development Department Investigation Division. Assistant United States Attorney Steven M. Arkow prosecuted this case.
Anyone with information regarding attempted COVID-19 related fraud can report it via the National Center for Disaster Fraud Hotline or through their web complaint form.