Will I Go to Jail If Charged with EDD Fraud in California?
EDD Fraud in California – Charges, Penalties & Defense Strategies
Unemployment insurance fraud—commonly referred to as EDD fraud—can lead to serious criminal charges in California. Whether you’re accused of falsifying information, collecting benefits you weren’t entitled to, or using someone else’s identity to apply, prosecutors treat these cases aggressively—especially in the wake of widespread COVID-era fraud.
EDD fraud cases often start with a letter from the California Employment Development Department, an audit, or a visit from a state investigator. In more serious cases, people are arrested or served with federal indictments, particularly when large sums of money are involved or there’s evidence of organized fraud.
If you’ve been contacted by investigators, received a court summons, or are already facing charges, it’s critical to understand what’s at stake—and what legal options you have. Jail time, restitution, and a felony record are all possible outcomes, but not every case leads to a conviction. With the help of an experienced Los Angeles criminal defense attorney, it may be possible to challenge the allegations, negotiate reduced charges, or avoid prosecution altogether
What Is EDD Fraud?
EDD fraud is the act of obtaining—or attempting to obtain—unemployment benefits by using false, incomplete, or misleading information. The California Employment Development Department (EDD) oversees the distribution of unemployment insurance (UI), pandemic unemployment assistance (PUA), disability insurance (DI), and other benefits. Fraud charges can arise if the agency believes someone intentionally provided false information to qualify for or increase those benefits.
Common Examples of EDD Fraud Include:
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Using someone else’s Social Security number or identity to apply for benefits
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Filing for unemployment while still working or receiving income “under the table”
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Submitting inflated income amounts or fake 1099 forms
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Collecting benefits from multiple states
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Failing to report a return to work or change in employment status
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Receiving payments for weeks in which no work search was conducted (as required)
During the COVID-19 pandemic, California saw an unprecedented surge in unemployment claims—along with a sharp increase in fraud. Billions of dollars in benefits were improperly distributed, triggering investigations by the California EDD, the California Department of Justice, the U.S. Department of Labor, and federal prosecutors.
Today, both state and federal authorities are continuing to investigate and prosecute these cases. Even individuals who were not part of large fraud rings—but simply made mistakes, misreported information, or misunderstood eligibility rules—have found themselves facing felony charges.
What Charges Can You Face for EDD Fraud?
EDD fraud isn’t a single charge—it’s a category of conduct that can trigger a range of criminal charges under both California and federal law. The exact charges you face will depend on the facts of your case, including:
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How much money was allegedly fraudulently obtained
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Whether false documents or identities were used
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If there was any coordination with others
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Whether the conduct crossed state lines or involved federal agencies
In California, prosecutors typically file charges under one or more of the following laws:
California State Charges for EDD Fraud
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Penal Code 550 – Insurance Fraud / Fraudulent Claims
This statute makes it a crime to knowingly present false or misleading information in support of an insurance or benefit claim, including unemployment insurance.
▸ Penalties: Up to 5 years in state prison and fines up to $50,000 (or double the amount of fraud). -
Unemployment Insurance Code 2101
This is a California-specific law that targets false statements, misrepresentations, or concealment of facts in connection with EDD benefits.
▸ Penalties: Up to 6 months in jail (misdemeanor) or 3 years in prison (felony), plus repayment and fines. -
Penal Code 484 / 487 – Theft and Grand Theft
Charges may be filed if the fraud involved more than $950 in benefits, elevating the case to grand theft.
▸ Penalties: Up to 3 years in county jail for felony grand theft, and potential restitution. -
Penal Code 530.5 – Identity Theft
Using another person’s name, Social Security number, or employment records to file for benefits can result in identity theft charges—regardless of whether the person actually received the money.
▸ Penalties: Up to 3 years in jail or prison, plus additional charges if financial harm was done.
Federal Charges for EDD Fraud
EDD fraud is often investigated by federal agencies like the FBI, U.S. Department of Labor, and the U.S. Attorney’s Office—especially when large sums, interstate activity, or pandemic-related funds are involved. Common federal charges include:
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18 U.S. Code 1343 – Wire Fraud
This is one of the most frequently used statutes in federal fraud cases. It applies when someone uses electronic communication (internet, email, bank transfers) to carry out a scheme to defraud.
▸ Penalties: Up to 20 years in federal prison, plus steep fines and restitution. -
18 U.S. Code 1028A – Aggravated Identity Theft
Filing fraudulent claims using another person’s identity—especially across state or federal systems—can trigger this charge.
▸ Penalties: Mandatory 2-year federal prison term, consecutive to other sentences. -
18 U.S. Code 371 – Conspiracy to Commit Offense or Defraud the U.S.
If two or more people worked together to submit fraudulent claims, even if they didn’t all receive money, federal prosecutors may charge conspiracy.
▸ Penalties: Up to 5 years in prison and significant fines.
State vs. Federal EDD Fraud Charges in Los Angeles
Many EDD fraud cases in Southern California are prosecuted by the Los Angeles County District Attorney, especially when they involve under $50,000, no complex identity theft, and are limited to California. However, cases with:
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Multiple defendants
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Large fraud rings
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Pandemic-era federal relief funds (PUA)
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Wire transfers or fraud across state lines
…are often picked up by federal authorities and charged in U.S. District Court. Federal charges carry significantly higher penalties and fewer diversion opportunities, which makes early legal intervention critical.
Will I Go to Jail for EDD Fraud?
If you’ve been accused of EDD fraud in California, you may be wondering if jail time is likely. The short answer is: yes, jail or prison is a real possibility—especially if the case involves a large dollar amount, identity theft, or federal charges.
That said, not every case results in incarceration. The outcome will depend on several factors, including the amount of money involved, whether this is your first offense, whether the fraud was intentional or a misunderstanding, and whether your case is being prosecuted at the state or federal level.
Here’s how the penalties break down:
Misdemeanor EDD Fraud (Typically Under $950)
If the fraud involves a smaller amount or the prosecutor agrees to file the case as a misdemeanor, potential penalties include:
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Up to 6 months or 1 year in county jail
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Fines up to $1,000
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Summary (informal) probation
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Restitution to the EDD for any overpaid benefits
In some cases, especially for first-time offenders, your attorney may be able to negotiate diversion, reduction to an infraction, or even a civil settlement to avoid criminal penalties.
Felony EDD Fraud (Over $950 or Involving Identity Theft)
If the amount exceeds $950, or if there’s evidence of identity theft or forgery, the case may be charged as a felony under Penal Code § 550, UI Code § 2101, or Penal Code § 530.5. Courts take these cases seriously—particularly when multiple claims were submitted, or false documents (like fake 1099s or identities) were used. Felony penalties include:
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16 months, 2 years, or 3 years in county jail (under realignment)
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Fines of $10,000 or more, depending on the amount taken
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Formal probation with strict compliance conditions
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Restitution to the government (often tens of thousands of dollars)
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Loss of immigration status, work licenses, or public benefits
Federal EDD Fraud Charges
If your case is charged federally—which is common when the alleged fraud exceeds $100,000, spans multiple states, or involves federal COVID-related programs—you may face substantially harsher penalties:
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Up to 20 years in federal prison for wire fraud (18 USC § 1343)
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Mandatory 2-year minimum sentences for aggravated identity theft (18 USC § 1028A), served in addition to any sentence for the underlying offense
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Seizure of bank accounts, vehicles, or property used or purchased with alleged fraud proceeds
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Federal probation, which can include electronic monitoring, work restrictions, and more
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Significant impact on immigration, security clearances, or professional licensing
Even if you haven’t been formally charged yet, speaking to a defense lawyer early can sometimes lead to pre-filing negotiations, reduced charges, or even avoidance of criminal prosecution altogether.
What Are the Consequences Besides Jail?
Even if you avoid jail time, a conviction for EDD fraud in California can follow you for years. Many people facing these charges are first-time offenders—often professionals, students, or self-employed individuals who didn’t realize their actions could lead to criminal prosecution. But once charged, the impact can be far more than just legal penalties.
Here are some of the most common collateral consequences:
Restitution to the Government
If convicted, you’ll almost always be ordered to repay the full amount of unemployment benefits the state believes you received unlawfully. Restitution orders can range from a few thousand dollars to $50,000 or more, depending on how much was claimed and over how long a period.
Restitution is required even if you serve jail time, and unpaid balances can result in:
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Wage garnishment
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Liens on bank accounts or property
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Long-term financial monitoring
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Civil collection lawsuits by the state or federal government
Loss of Professional or Occupational Licenses
A fraud conviction—especially one involving public funds—can jeopardize state-issued professional licenses. This includes:
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Nurses, doctors, EMTs
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Teachers and school employees
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Real estate agents and brokers
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Contractors
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CPAs, attorneys, and other licensed professionals
Even an arrest, without a conviction, can trigger an investigation by a licensing board. If convicted, you may face suspension, revocation, or denial of license renewal.
Immigration Consequences
Fraud is considered a crime of moral turpitude under federal immigration law. If you are not a U.S. citizen, a conviction—especially for a felony—can result in:
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Deportation
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Inadmissibility (bar to reentry if you leave the country)
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Denial of green card, citizenship, or visa extensions
These consequences apply even if you’ve lived in the U.S. for years, have no other criminal record, or have family here.
Damage to Employment and Background Checks
A criminal record—especially one involving fraud—can make it harder to find or keep a job. Employers who run background checks may view a fraud conviction as a red flag, even if no jail time was served.
This can impact:
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Government jobs
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Jobs involving money, data, or clients
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Careers requiring background checks or security clearance
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Corporate roles or client-facing positions
A Felony Record That Follows You
Many EDD fraud cases are filed as felonies, especially when identity theft or large dollar amounts are involved. A felony conviction in California can carry long-term consequences, including:
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Loss of firearm rights
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Barriers to housing or public benefits
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Ineligibility for federal student aid
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Stigma in your personal and professional relationships
That’s why it’s essential to take these charges seriously—even if it feels like “just paperwork” or a mistake you didn’t mean to make.
How Are EDD Fraud Cases Investigated?
Many people are caught off guard when they’re contacted about EDD fraud. You might assume it’s just a clerical issue—but in reality, these investigations often begin weeks or months before you’re ever notified.
Here are some of the most common ways EDD fraud cases are flagged:
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EDD audits – The agency routinely cross-checks benefit claims with employer wage reports. If you were receiving benefits while reporting income elsewhere, it can trigger a review.
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Employer or coworker tips – A past or current employer may report suspected fraud, especially if they learn someone collected benefits while working.
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Identity theft alerts – Some cases begin when an individual reports that someone else used their name or SSN to claim unemployment benefits.
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Suspicious 1099 forms – Claims submitted using false income amounts or fake employer data can raise red flags—especially when multiple applications list the same employer.
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Unusual digital patterns – The EDD tracks logins, IP addresses, and claim histories. Repeated claims from the same computer or phone can be flagged for fraud.
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Federal and state data sharing – California works closely with agencies like the IRS, FBI, U.S. Postal Service, and Department of Labor. Many cases involve joint investigations, especially for pandemic-era claims.
Once a case is flagged, investigators may quietly gather bank records, employment info, or surveillance data—long before contacting the person under suspicion.
How Can a Criminal Defense Attorney Help with EDD Fraud Charges?
If you’ve been contacted by the EDD, received a letter from the District Attorney, or are already facing fraud charges, it’s critical that you do not speak to investigators before consulting with a lawyer. Even casual conversations or attempts to “explain” can end up being used as evidence against you.
Here’s how our firm helps protect clients from the start:
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Intervening early with investigators – In some cases, we can stop charges from being filed at all by clarifying the facts before the case moves forward.
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Challenging intent – EDD fraud charges require proof that the defendant acted knowingly and with intent to defraud. We push back hard when the evidence doesn’t meet that standard.
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Negotiating restitution or civil resolution – In situations where funds were overpaid, we may be able to resolve the case through repayment rather than criminal prosecution.
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Reducing or reclassifying charges – Our attorney works to get felonies reduced to misdemeanors—or seeks non-criminal outcomes like diversion when possible.
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Protecting professional and immigration consequences – Fraud convictions carry lasting damage. We tailor your defense with an eye toward preserving your record, your job, and your future.
Accused of EDD Fraud in Los Angeles? Speak with a Criminal Defense Attorney
Facing allegations of unemployment insurance fraud can feel overwhelming—especially when investigators are asking questions, or formal charges have already been filed. Whether your case involves a small overpayment or is part of a larger federal investigation, having the right defense strategy in place from the beginning can make all the difference.
At The Law Offices of Arash Hashemi, we understand what’s at stake. Attorney Hashemi has spent over 20 years representing clients in Los Angeles County facing fraud, identity theft, and white collar criminal charges. Our approach is strategic, proactive, and focused on protecting your record, freedom, and future.
If you’ve received a letter, audit notice, or been contacted by EDD investigators:
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We’ll sit down with you and carefully review your situation
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We’ll explain what the state or federal government needs to prove
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We’ll walk you through your legal options and possible outcomes
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And we’ll build a defense aimed at resolving the case as favorably as possible—whether through dismissal, reduction, or alternative sentencing
Don’t wait until you’re in court to take action. The sooner you speak with a knowledgeable defense attorney, the more control you’ll have over the process.
Contact our office today for a free, confidential consultation and take the first step toward protecting your future.
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