Major fraud involving COVID-19 unemployment benefits paid to California prison inmates is worse than initially reported.

State investigators said they have now identified $400 million in jobless benefits sent to inmates, including prisoners on death row.

LA Times state government reporter Patrick McGreevy explains the latest.

The first reports of fraud involving prisoners emerged at the San Mateo County Jail in August.

"Some guard overheard prisoners bragging about milking the unemployment benefits system. Since then, they started looking elsewhere and found it in other jails and the state prison system. The California Unemployment Development Department finally did a match with social security numbers of prisoners, with people that filed claims, and found there were 21,000 claims filed in the names of prisoners," said McGreevy.

Some of these claims involve high profile prisoners.

"These are convicted murderers like Scott Peterson, Cary Stayner, more than 100 people on death row who had claims filed in their names and money paid to them," added McGreevy.

The investigation is still ongoing, and investigators are trying to figure out whether people received money or not.

"They believe it's a mixture of three things — people who knew prisoners who filed claim benefits in their names and then got the money and gave part of it maybe to the prisoners. The second thing is people who stole prisoners' identities and filed claims in their names, and took the money themselves. They are still trying to find out if some prisoners got money directly through family members of somebody else by filing a claim. That is opening a can of worms about access to computers in prison that is not supposed to be accessible and people smuggling smartphones. So the investigation is going on," said McGreevy.

"Questions have been raised about the type of information someone would need to have to file these claims. Through identity theft and other methods, scammers have been able to get social security numbers, dates of birth, and addresses. A lot of the fraud involves identity theft, but if the prisoner himself wants to be a part of this, he could just tell his friend 'here's my social security number, here's my date of birth, put the claim in my name,'" added McGreevy.

The $400,000,000 that was identified were payments made on the claims. 

"After investigators started discovering this, they put a freeze on a lot of these claims. There is a chance there is some money still in those accounts that have not been cleaned out yet that can be clawed back. However, a lot of the money is gone; they heard people in prison saying that they bought a new watch for their mom or paid other expenses with that money. So some of that is already gone," said McGreevy.

A group of district attorneys complained that the state has been slow to act to prevent fraud involving inmates by cross-matching personal data from claims to the list of inmates, as many other states do.

"Governor Gavin Newsom sent a letter to the district attorneys that complained and said he agrees with them and that the fraud is completely unacceptable. He is very alarmed by what is going on. He's formed a task force that's coordinating statewide investigations into this — looking at County jails, state prisons, and he's not going to allow this to continue and is calling for more changes to make sure there is more security," added McGreevy.