SACRAMENTO, Calif. (AP) — California’s system for paying unemployment benefits is so dysfunctional that
the state approved more than $140 million for at least 20,000 prisoners, local and federal prosecutors
said Tuesday, detailing a scheme that resulted in claims filed in the names of well-known convicted
murderers like Scott Peterson and Cary Stayner.
From March to August, more than 35,000 inmates were named in claims filed with the California Employment
Development Department, with more than 20,000 being paid, according to Sacramento County District
Attorney Anne Marie Schubert. At least 158 claims were filed for 133 death-row inmates, resulting in
more than $420,000 in benefits paid
"It involves rapists and child molesters, human traffickers and other violent criminals in our state
prisons," Schubert said.
The list includes Peterson, who was sentenced to death after being convicted of killing his pregnant wife
following a trial that riveted the nation. The California Supreme Court recently overturned Peterson’s
death sentence and has ordered a lower court to review his murder conviction.
Schubert confirmed there was a claim made in the name of Scott Peterson, but declined to provide further
details.
Peterson’s attorney, Pat Harris, said while Peterson’s name surfaced during the investigation, there is
no evidence Peterson received unemployment aid from the state.
"This investigation, when it’s completed, will show that he had not a thing to do with any kind of
scheme to get fraudulent benefits," Harris said.
Schubert listed a number of inmates there who had claims filed in their names, including Stayner,
convicted of killing four people in Yosemite National Park in 1999; Susan Eubanks, a San Diego woman
convicted of shooting her four sons to death in 1997; Isauro Aguirre, who was sentenced to death for the
2013 murder of 8-year-old Gabriel Fernandez in Los Angeles; and Wesley Shermantine, part of the duo
dubbed the "Speed Freak Killers" for their meth-induced killing rampage in the 1980s and ’90s.

Prosecutors said they learned of the scheme from listening in on recorded prison phone calls, where
inmates would talk about how easy it was for everyone to get paid. They said the scheme always involved
someone on the outside — usually friends or family members of the inmates, who would then receive the
benefits.
In Kern County, home to five state prisons, one address was used to receive benefits for 16 inmates.
"In my nearly four decades as a prosecutor in this state, I have never seen fraud of this
magnitude," Kern County District Attorney Cynthia Zimmer said.
In some cases, inmates used their real names. In others, they used fake names and even fake Social
Security numbers. In one instance, an inmate used the name: "poopy britches," Schubert said.

"Quite frankly, the inmates are mocking us," Schubert said.
So far, 22 people have been charged in San Mateo County, including six people who were not in prison.
Prosecutors said dozens of other investigations across the state are continuing.
Prosecutors blamed the Employment Development Department, which has been overwhelmed by more than 16.4
million benefit claims since the pandemic began in March, resulting in a backlog that at one time
totaled more than 1.6 million people.
But prosecutors said in its haste to approve benefits, the department did not check unemployment claims
against a list of prisoners, as many other states do. San Mateo District Attorney Stephen Wagstaffe said
that when he notified the department about inmates fraudulently receiving benefits, they told him they
could not cut off the payments until they were formally charged with a crime.
The problem was so bad that on Monday, nine county district attorneys sent a letter to Gov. Gavin Newsom
asking for him to intervene.
"We face a manifest problem that requires action, not talk," said McGregor Scott, U.S. Attorney
for the Eastern District of California.
Employment Development Department spokeswoman Loree Levy said the agency has been working with the
Department of Labor’s Office of Inspector General on cross-checking claims with inmates, saying they are
"pursuing how to integrate such cross-matches moving forward as part of enhanced prevention efforts
during this unprecedented time of pandemic-related unemployment fraud across the country."
In an email to the AP, Newsom called the fraud "absolutely unacceptable." He said he first
learned of the fraud earlier this year, which prompted him to order the department to "review its
practices and take immediate actions to prevent fraud and to hold people accountable."
Newsom said he has ordered the Office of Emergency Services to set up a task force to assist prosecutors
with their investigation.
"While we have made improvements, we need to do more," Newsom said.
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This story has been corrected to show 20,000 of 35,000 claims were paid.
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This story has been corrected to show that convicted killer Wesley Shermantine’s last name was
misspelled.