Michele Gutierrez’s 82-year-old mother hasn’t worked a day since retiring 18 years ago from a successful career as the owner of a Long Beach home health care business.

So it was with dismay in December that Gutierrez discovered an unusual $450 charge to her mom’s debit card from ML Tax and Insurance in Cerritos to process an application for California unemployment benefits and qualify her for an additional $300 a week in federal Pandemic Unemployment Assistance.

“She told me her friend referred her to a ‘Trump program’ that allows seniors to get money because of COVID,” Gutierrez said. “The debit card charge was a down payment to process her application and manage her account so she would continue to receive payments up to $20,000.”

Unsatisfied with that explanation, Gutierrez spoke with an ML Tax and Insurance employee and questioned how her mother could possibly qualify for unemployment and pandemic benefits.

“They explained they had used a loophole in the law to apply on behalf of my mother,” Gutierrez said. “Because seniors are technically able to work even after they retire, she qualified for benefits. Along with the $450, she owed an additional $300 when she received her first payment.

Woman not eligible

The California Employment Development Department described ML Tax and Insurance’s unemployment claim service for seniors as concerning. It is investigating the company as a result of a Southern California News Group inquiry .

“State-issued unemployment insurance and the various federal unemployment programs that are publicly available provide wage replacement benefits,” the agency said in an email. “An individual who hasn’t worked, or hasn’t attempted to work, for a period of years, either for an employer or through self-employment/independent contracting would not typically be eligible for unemployment benefits.”

Michael Bernick, a San Francisco attorney and former director of the EDD, agrees.

“An 82-year-old woman with dementia, who has no business, is not eligible for Pandemic Unemployment Assistance, just as she is not eligible for regular unemployment insurance.”

Gutierrez’s mother, who asked not to be identified, said she was driven by a friend to ML Tax and Insurance, located in a small, nondescript strip mall, and found it bustling with customers. “There were lots of phone calls and people coming and going,”  the woman recalled.

She provided her driver’s license and Social Security card to an employee, who helped her use a computer to fill out a state unemployment application.

Money arrives, daughter shocked

About two weeks after ML Tax and Insurance submitted the application for Gutierrez’s mom, an EDD debit card from the Bank of America arrived in the mail loaded with $2,000 in unemployment benefits.

“Not only was I confused, I was panicked,” Gutierrez said. “How can a senior who has not worked for 18 years, who can barely make it up her stairs and who has a dementia diagnosis, qualify for unemployment benefits?”

Since then, the amount on her mother’s EDD card has increased to more than $3,100.

An ML Tax employee told Gutierrez’s mother she needed to return to the business so the debit card could be activated, thus enabling the processing fees to be deducted. Gutierrez refused to take her back to the business.

“I didn’t want my mom to be involved in fraud,” she said.

Last week, Gutierrez phoned Manny Legaspi, the owner of ML Tax and Insurance, to find out more about her mother’s unemployment claim and how much money she owes the company. The conversation only heightened her concerns.

Legaspi told Gutierrez her mother owes $1,700, which equates to about 10 percent of the total unemployment and pandemic assistance payments she was set to receive.

Gutierrez said Legaspi admitted he had certified to the state that her mom, despite her advanced age and not having worked since 2003, was looking for employment, but was fearful of COVID-19 because of underlying medical conditions. Additionally, Legaspi urged her to contact her mom’s “colleagues” to determine if they were satisfied with his services.

Legaspi told the Southern California News Group he canceled Gutierrez’s EDD claims after learning she has dementia but declined to comment further.

Massive EDD fraud

Last month, the Bank of America sent a warning letter to the California State Assembly indicating it was asked in September by the EDD to freeze about 345,000 accounts due to $2 billion in suspected fraud that occurred largely during the enrollment process.


Children and elderly individuals as old as 100 unlikely to be recently unemployed were among those receiving suspicious benefits. “Criminal fraud in pandemic unemployment insurance programs is not unique to California, although the scale of program fraud in California is unique,” the Bank of America letter says.

Earlier this month, the EDD noted the number of suspicious accounts had climbed dramatically and reported that 1.4 million unemployment claims had been flagged requiring filers to verify their identities.

Could lose other benefits

Gutierrez worries that if the unemployment payments were allowed to continue, her mother — who has a low, fixed income — could lose Medicaid benefits for a variety of services, including in-home care, prescriptions and other programs.

“If this (unemployment) money was real, we would have to report it as income,” Gutierrez said. “Her eligibility for these services would be canceled and she would be responsible for the 20% of her medical costs that does not cover.”

Legaspi contends unemployment and pandemic payments to retired, senior citizens are legal and do not affect Medi-Cal benefits, according to Gutierrez. Attempts to confirm with the state whether that claim is accurate were unsuccessful.

Gutierrez said even if Legaspi explained the ins and outs of unemployment benefits to her mother, it is unlikely she would understand the ramifications.

“My mother is diagnosed with dementia,” Gutierrez said. “She might seem functional, but she needs me to make financial and medical decisions on her behalf. They said they hadn’t known that and I told them they should consider that the next time they try to do this with another senior.”



By Arlene Huff

Arlene Huff is the founding member of Golden State Online. Before that She was a general assignment reporter. A native Californian, she graduated from the University of California with a degree in medical anthropology and global health. She currently lives in Los Angeles.

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