Former state worker from Carson and ex-boyfriend get 1 year, 8 months in prison for pandemic benefits scheme

LOS ANGELES — A former employee of the California Employment Development Department, which administers the state’s unemployment insurance program, and her ex-boyfriend were sentenced Friday in downtown Los Angeles to federal prison terms for fraudulently  obtaining hundreds of thousands of dollars in COVID-19 pandemic-related jobless benefits.

Phyllis Stitt, 61, of Carson was sentenced to 20 months — one year and eight months — in federal prison by U.S. District Judge  André  Birotte Jr., who also ordered her to pay $768,958 in restitution, according to the U.S. Attorney’s Office.

Birotte also sentenced Kenneth Riley, 64, of South Los Angeles, to 20 months behind bars and ordered him to pay $611,458 in restitution.

Stitt pleaded guilty in January in downtown Los Angeles to one federal count of conspiracy to commit mail and bank fraud for filing at least 29 bogus claims that caused the EDD to lose $768,958. Riley pleaded guilty to the same charge.

Stitt and Riley had been in a relationship as domestic partners with each other for over a decade at the beginning of the COVID-19 pandemic when Stitt was employed by the EDD as an employment program representative, according to their plea agreements. Her job duties included determining claimant eligibility for unemployment insurance benefits and performing claim processing activities.

From March 2020 to September 2021, while using the access and information available to her in her position with the EDD, Stitt acquired the names, dates of birth, Social Security numbers and other personal identifying information of victims that were used to submit fraudulent claims.

Stitt then filed fraudulent applications for benefits without the victims’ knowledge or consent, and then increased the amount paid out by backdating the fraudulent requests to maximize the claims, federal prosecutors said.

She certified the fraudulent applications stating that the victims had submitted their employment history and driver’s license information, and confirmed they were unemployed because of the pandemic and actively were searching for work.

Many of the victims were ineligible to receive the benefits because they were currently employed, not unemployed because of the pandemic, or were deceased at the time, according to the U.S. Attorney’s Office.

In filing the phony applications, Stitt used mailing addresses that Riley had access to. Debit cards and accounts created as a result of the fraudulent applications were then accessed by Riley and others, who made cash withdrawals at ATMs, bank transfers and retail purchases.