California taps ex-federal prosecutor McGregor Scott for special counsel in EDD fraud cases
Former U.S. Attorney McGregor Scott has been named as a special counsel to help coordinate investigations into California’s massive unemployment fraud scandal that began at the height of the COVID-19 pandemic.
Scott, who left his post Feb. 28 as U.S. attorney for the Sacramento-based Eastern District of California, will serve as fraud special counsel to help coordinate the prosecution of fraud cases involving phony claims to the state’s Employment Development Program.
Scott is now a partner at the law firm King & Spalding and will work through that position aiding a task force that is investigating and prosecuting EDD fraud.
“State unemployment systems last year were under attack by sophisticated international and domestic organized fraud schemes,” Scott said in a statement issued Tuesday by EDD. “We look forward to working with EDD, (the Governor’s Office of Emergency Services) and local, state, and federal prosecutors to identify, investigate and prosecute those who stole benefits that rightly belonged in the pockets of Californians in need.”
As U.S. attorney, Scott was involved in investigating the scope of the EDD fraud scandal from the beginning, teaming last November with Sacramento County District Attorney Anne Marie Schubert and other D.A.’s to expose what they have called the biggest taxpayer fraud in California history.
The scandal, which included Death Row inmates and other prisoners obtaining fraudulent unemployment benefits, originally was estimated at topping $1 billion.
That figure is now estimated at more than $11 billion and involves fraudulent payments made to scammers worldwide, authorities say.
As U.S. attorney, Scott prosecuted inmates, former EDD workers and others accused of using the pandemic to enrich themselves, and officials say nearly 500 cases have been filed nationwide stemming from such fraud.
Among those was one filed in federal court in Sacramento last week charging three Maryland residents with being part of an insurance fraud ring that targeted California EDD and other states for $2.6 million in phony claims.
That ring allegedly was run out of a Hyattsville, Maryland, apartment that was used as an address for more than 200 California EDD claims, court papers say. EDD approved payments for 97 of those claims.
Since the scandal broke, authorities say states have tightened restrictions on approving EDD claims before payments are sent out.
“California took broad action last year to identify and stop criminal unemployment fraud from continuing—and with McGregor Scott’s aid we are taking another major step toward empowering prosecutors to crack down on those who engaged in this criminal activity,” California EDD Director Rita Saenz said in a statement. “McGregor Scott has led numerous large-scale criminal probes in his many years as a state and federal prosecutor — experience that will help put criminals who defrauded the system behind bars.”
This story was originally published July 20, 2021 at 4:47 PM.