Sacramento EDD fraud bust turns up guns, $550,000 fraud, authorities say

Sacramento officials announced the arrests Friday of a gang member and his girlfriend in connection with a $550,000 unemployment fraud case involving dozens of victims and the seizure of several assault weapons.

Sacramento District Attorney Anne Marie Schubert’s office said police executed a search warrant on a Greenhaven-area apartment last month, where they discovered 15 Employment Development Department cards and a red notebook with the names of 55 people — along with their dates of birth, Social Security numbers and passwords for various EDD accounts.

Officers with the Sacramento Police Department’s North Gang Enforcement Team also found “several” assault weapons with extended magazines, handguns and $1,100 in cash, Schubert’s office said.

An investigation into the EDD accounts determined that two suspects had received more than $550,000 in EDD funds fraudulently, the D.A. said.

The investigation led to the arrests Friday of James Smith, 25, a gang member with a prior strike conviction for residential burglary, and Chyna Hill, 21, authorities said.

Schubert’s office charged the two with possession of assault weapons, 23 counts of unemployment insurance fraud, 13 counts of possession of stolen property and a single count of possessing identifying information with intent to defraud more than 10 people.

Smith also was charged with being a felon in possession of firearms and ammunition.

The arrest is the latest in a series of investigations into EDD fraud by felons on probation who officials say have been using funds from the fraud schemes to purchase weapons.

Authorities blame a spike in shootings and violent crime in part on the schemes, which have been seen in counties throughout the region.

Schubert and other law enforcement officials announced in November they discovered a massive EDD fraud scheme by inmates, associates outside of prisons and others to file phony unemployment claims in their own names or the names of other individuals, including U.S. Sen. Dianne Feinstein, D-Calif.

The fraud schemes have since spread across the nation and overseas, and authorities say losses have topped $11 billion.

This story was originally published February 19, 2021 at 4:53 PM.