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10 billion dollars in fraudulent unemployment benefits and possibly much much more that is the unbelievable amount of money criminals trick the state into paying them a new state audit released today lays out the con that crippled california's unemployment system but does offer some solutions consumer investigator chris kumar just spoke with the state auditor and chris how did those crooks get away with so much money the auditor says they simply exploited the state's weaknesses missteps and slow reaction time they made off with a historic amount of money and made a mockery of the system that's supposed to be a lifeline for unemployed workers one two three when stacks of unemployment department envelopes began showing up in people's mailboxes they called us because folks like marco vachetto in oakland knew something was fishing we don't understand it might be fraud i don't know it was fraud and edd knew it the auditor says edd identified 26 000 street addresses where fraud was suspected and yet the department only stopped sending money to 10 000 of them then there's this the auditor says it discovered more than 80 claims from one address edd sent more than three hundred thousand dollars to that single address what does it say about the agency when it sends more than three hundred thousand dollars to just one mailing address well again that's that's a serious obviously a serious issue i mean this was an issue that came to edd's attention but edd didn't react fast enough the auditor says a breakdown in identity verification let criminals go wild she wrote that edd has relied on uninformed and disjointed techniques to prevent imposter fraud that gap gave criminals an advantage to score 10.4 billion dollars or more the auditor says hundreds of thousands of unemployment accounts still haven't been verified so if any are fake and got paid the bad guys total haul will continue climbing higher than 10.4 billion dollars we can't estimate exactly how much it will end up being but we're pretty confident it's going to be in the billions probably tens of billions of dollars our contacts in law enforcement and banking suspect most stolen benefits went overseas and could be impossible to get back that's what we've heard as well it's clear that they were organized this is not somebody who just got on the internet and was just doing this for for fun or doing this for the first time clearly to help edd prevent repeat failures the auditor laid out seven new recommendations the new edd director has already agreed to implement all seven lawmakers will be watching you know it's all about being the right seven today the auditor acknowledged that many people's legitimate unemployment accounts are currently frozen there's a spat between the state and bank of america over how to flag an account as suspicious well the auditor dressed down both sides and told them they need to separate real accounts from fake ones asap but that might take until march at a time when families need their unemployment benefits immediately we get it you can share your unemployment problems on our website go to nbc bay area dot com responds or you can call us the number is 888 996 tips janelle sir