SACRAMENTO, Calif. -- When police in California's capital city searched an apartment in mid-January, the most telling item they found wasn't the illegal assault weapons -- it was a small red notebook filled with 55 names and their birthdays, Social Security numbers, usernames and passwords associated with accounts at the state's unemployment benefits agency.
Police say that one notebook was worth more than half a million dollars in fraudulent benefits, money delivered on more than a dozen debit cards that was probably used to purchase the illegal weapons. On Friday, authorities arrested 25-year-old James Smith and 21-year-old Chyna Hill and charged them with 23 counts of unemployment insurance fraud, along with 13 counts of possession of stolen property and one count of possessing identifying information with the intent to defraud more than 10 people.
Smith and Hill were in custody Friday, according to the Sacramento County Jail's website. It's unclear if they have an attorney.
The amount of fraudulent benefits -- more than $550,000 -- is small compared to the estimated $11 billion in total fraud officials have discovered in California's unemployment system in the past year. But it illustrates just how lucrative the nation's unemployment system can be for criminals.
Across the country, state unemployment offices were overwhelmed with jobless claims during the pandemic. Congress approved an additional $600 per week in benefits with fewer eligibility safeguards, making it easier and more profitable for thieves.
Friday's arrests show how time-consuming it will be for authorities to track down people accused of stealing that money. In this case, police weren't looking for evidence of unemployment fraud, but they stumbled upon it. It took more than a month for investigators to track down all of the money associated with the names in the red notebook.
Sacramento County District Attorney Anne Marie Schubert said she has about a dozen investigators assigned to unemployment fraud, estimating they are looking into close to $3 million in fraud right now.
"We could probably work ourselves for the next 10 years on these cases," because there are so many, she said.
District attorneys across the state discovered last year the state had OK'd millions of dollars in unemployment benefits in the names of prison inmates, including killers on death row at the San Quentin State Prison. An audit released last month showed the state paid at least $810 million in the names of 45,000 inmates.
State and federal prosecutors throughout the state have been investigating fraud for months. In October, police in Beverly Hills arrested 100 people accused of unemployment fraud and recovered 200 debit cards and $500,000 in cash.