Arkansas thieves rip off $2.7 million in California EDD benefits, indictment says

Ten Arkansas residents were indicted this week for allegedly robbing $2.7 million in California unemployment benefits, according to federal authorities. The 10 are being charged with wire fraud and bank fraud.

One of the defendants, Madison Clark, 24, worked as a contract employee for TeleTech or TTEC, a customer-service company hired by Bank of America, which handles debit cards for California jobless benefits.

“Her duties included answering consumer questions involving unemployment debit cards as well as claims processing for unemployment debit cards,” said an indictment.

“Clark used her access to issue debit cards, remove fraud blocks, and add credits to unemployment debit card accounts,” said a press release from the US Department of Justice Attorney’s Office in Little Rock, Ark.

The other defendants, as well as people they recruited, then used the fraudulent debit cards to withdraw funds.

California’s Employment Development Department was overwhelmed by a pandemic surge in claims over the past two years. Officials said it lost between $11 billion and $31 billion to a wide variety of criminals who leaped at the chance to scam the struggling system. Perpetrators included gangs of prison inmates, overseas organized crime rings and others.

Bank of America, rather than EDD, is considered the victim in this case. It detected the fraud.

“We engaged law enforcement on this matter and have cooperated with the investigation,” said BoA spokesman William Halldin.

Clarkly allegedly helped her co-conspirators double-dip to increase their ill-gotten gains. She had the ability to grant “provisional credits” to cards when the cardholders claimed transactions weren’t authorized.

The indictment said she “accessed BOA systems without authorization to reissue debit cards, remove fraud blocks, and add provisional credits to unemployment debit card accounts, resulting in more than $2 million in losses.”

The alleged crimes occurred from January to August 2021.

The press release said that Khi Simms, 27, of Alexander, Ark., was ordered to remain in federal custody after a detention hearing before United States Magistrate Judge J. Thomas Ray.

Three other defendants, Brelyn London, 27; Karl Harris, 26; and Deuntae Diggs, 26; all of Little Rock are in custody awaiting trial. The remaining six defendants, Clark, 24, of Alexander; Keshoun Coleman, 23; Derrick Harris, 19; Terence Holman, 27; Brandon Shavers, 29; and Quentin Watson, 27; all of Little Rock, are free on bond.

A trial is scheduled for April 18.

Carolyn Said is a San Francisco Chronicle staff writer. Email: [email protected]

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