News & Insights

Cases & Deals

June 21, 2022

California Employment Development Department Recovers $1.4 Billion in Fraudulent Unemployment Disbursements

In a major victory for King & Spalding’s clients Governor Gavin Newsom and the California Employment Development Department (EDD), EDD recently recovered $1.4 billion in fraudulently-obtained unemployment insurance payments.

Governor Newsom and EDD hired McGregor Scott and King & Spalding in the summer of 2021 to serve as Special Counsel to coordinate the agency’s response to an unprecedented wave of unemployment fraud that occurred during the COVID pandemic, including furthering the investigation and prosecution of this fraud, and working to secure restitution of these stolen funds to EDD and the taxpayers. The majority of recovered funds were located on approximately 780,000 inactivated and suspected fraudulent benefit cards.

The latest $1.4 billion recovery furthers the efforts of King & Spalding, the EDD, and the California Governor’s Office of Emergency Services to investigate and prosecute criminals who defrauded federal emergency unemployment benefit programs. Within the past 15 months, total investigations, prosecutions, and dollars seized in the counties reporting information to the state include 1,525 investigations, 467 arrests and 162 convictions.