SACRAMENTO — About $1.1 billion in unused unemployment benefits returned to California, on Tuesday, money state officials said was most likely attempted fraud during the pandemic.

The money had been sitting on 780,000 Bank of America debit cards that were never used. State officials worked with Bank of America to make sure those benefits did not belong to people with legitimate claims who were just having difficulty activating their cards. Once they were satisfied, the government took the money back.

Before the pandemic, less than $10 million per year in unused benefits returned to the state, but Tuesday, the Newsom administration announced it was $1.1 billion, from 2020, a sign of the size and scale of fraud that targeted the nation’s most populous state.

State officials could not say all of the reasons why fraudsters would not use those debit cards. In some cases, people who had not applied for unemployment benefits had received debit cards in the mail — a sign that someone had stolen their identity and used it to apply for assistance. Some of those people then returned those debit cards without using them.

Regardless, Tuesday’s announcement was the largest to date of likely fraudulent unemployment claims in California. Most of the money was returned to the US government, not the state, because nearly all of the fraud was aimed at a new federal program designed to benefit independent contractors who are not normally eligible for unemployment benefits.

California was the first state to issue a statewide stay-at-home order during the pandemic, forcing many businesses to close and putting millions of people out of work. Since March 2020, the state has paid $183 billion in unemployment benefits based on 27.3 million new and reopened claims.

The California Employment Development Department was quickly overwhelmed by all of the applications. Facing intense public pressure, state and federal officials relaxed some rules to get the money out faster and to make more people eligible for assistance.

Criminals took advantage of that to steal about $20 billion in benefits through a variety of brazen schemes, including using the names of people who were obviously not eligible to receive the money, like inmates on death row and a sitting US senator. Given the complexity of finding and prosecuting these criminals, experts believe most of that money is gone for good.

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