Orange County District Attorney Todd Spitzer announced three cases — including two that involved convicted murderers — of defrauding the state’s unemployment program during the COVID-19 pandemic on the eve of hearings in Sacramento on Tuesday to address how to tackle the thefts.
In one of the cases, the defendants are accused of about $490,000 in fraud, with about $50,000 in another case and about $80,000 in a third, Spitzer said at a news conference.
The three cases are unrelated, but part of a rash of unemployment fraud that has touched off hearings in Sacramento led by Assemblywoman Cottie Petrie-Norris, D-Laguna Beach.
“It is beyond disturbing,” Spitzer said of the fraud. “People should be very, very upset and angry about this. I’m very angry about this.”
Norris said the ripoff of the state’s unemployment program to help those laid off due to the pandemic was “truly despicable.”
She added it was “just the tip of the iceberg,” as investigators expect many more schemes to be uncovered. She said her hearings were aimed to “making sure this never happens ever again.”
Orange County prosecutors and the Employment Development Department launched an investigation in November when tipped off about a Garden Grove business advertising it would help with unemployment applications.
Nguyen Social Services LLC is suspected of filing more than a thousand applications for unemployment assistance, prosecutors said. One of the applicants was a 99-year-old woman claiming to have lost work as a housekeeper, Spitzer said.
The state has doled out $113 billion in unemployment benefits since the pandemic began. A state investigator hired to look into fraud allegations says at least 10% of the claims are phony, prosecutors said.
Huy Duc Nguyen, 32, and Mai Dacsom Nguyen, 40, both of Garden Grove, started Nguyen Social Services to file bogus unemployment claims, prosecutors alleged. They advertised the business in Vietnamese and would allegedly take $200 to $700 kickbacks, prosecutors said.
Spitzer said investigators sized about $300,000 in cash while serving a search warrant on the company at 9840 Garden Grove Blvd., and then took steps to freeze the bank accounts.
Both men were released without bail, Spitzer said.
“Both of these men were released on zero bail because of COVID-19… They exploit unemployment because of COVID-19 and get out without bail because of COVID-19,” Spitzer said. “What a twisted irony.”
In one of the cases filed last week, Rosalva Bahena, 35, of Irvine, her brother, Bruno Galindo, 49, and Guillermo Rodriguez, 53, were charged in connection with the alleged conspiracy, according to the criminal complaint.
Bahena is charged with three counts each of perjury and false statement or representation or concealment, money laundering, and a count of conspiracy to defraud another of property, all felonies.
Galindo is charged with three counts each of false statement or representation or concealment and money laundering and a count of conspiracy to defraud another of property, all felonies.
Rodriguez is charged with single felony counts of false statement or representation or concealment and conspiracy to defraud another of property.
Galindo, who is in prison, is accused of falsely claiming he lost his full-time job at a smoke shop because of the pandemic in August, according to the criminal complaint. Galindo was convicted of attempted murder in January of 2005 in Riverside County and is not eligible for parole until June of 2031.
Bahena was being held on $125,000 bail, according to jail records.
She is accused of conspiring with Galindo to defraud the California Employment Development Department with bogus pandemic-related unemployment claims on behalf of three prisoners, according to the criminal complaint.
Bahena is also accused of using the debit cards issued to Galindo and Rodriguez to withdraw money from Bank of America in August, October and November.
Bahena pleaded guilty in December 2016 to carjacking in a plea bargain that led to the dismissal of charges of kidnapping, car theft and buying or receiving a stolen vehicle, according to court records. She was sentenced to three years in prison in February 2017.
The three are accused of stealing at least $50,000, Spitzer said.
Rodriguez was sentenced to 110 years to life in prison in December 2010 for strangling his married neighbor, who had multiple sclerosis, after he caught her in bed with his 18-year-old son.
The Fullerton resident was convicted for the Oct. 15, 2006, strangulation death of 43-year-old Donna Dutton at the Streams apartment complex at 1251 Deerpark Drive.
Rodriguez also pleaded guilty in February 1997 to robbery and assault with a deadly weapon and was sentenced then to four years in prison.
In another case, tax preparer Sandra Pineda, 35, of Anaheim, is accused of conspiring with four state prisoners, including two convicted murderers, of filing bogus unemployment claims.
Pineda allegedly filed a claim for Leonel Hernandez, 30, who has been in Kern Valley state prison since February 2010 for murder, prosecutors said.
She is also accused of helping to file bogus unemployment claims for prisoners Greg Garcia, 29, Ryan Vargas, 36, and Hector Jimenez, 31.
Pineda is charged with five counts of perjury, five counts of making a false statement and a count of conspiracy to defraud another of property, all felonies. She could face up to eight years and eight months in prison if convicted at trial, prosecutors said.
Jimenez, Vargas and Hernandez could face up to seven years and eight months in prison if convicted, Spitzer said. He asked whether it was worth spending the resources to add time to criminals already serving lengthy sentences.
“They probably realized the consequences are not that high for them,” Spitzer said. “At the same time, if we do not pursue those charges what kind of message does that send (to other inmates).”
Spitzer called on state lawmakers to provide more resources to local prosecutors to pursue the scams. He said his office could not shoulder the expense of pursuing all of the state unemployment scans.