Inmate pleads no contest to charges in unemployment fraud ring

A state prison inmate suspected of involvement in a Covid-19 unemployment assistance fraud ring pleaded no contest Tuesday to charges of conspiracy to commit fraud, San Mateo County prosecutors said.

Joseph Anthony Smith III was part of a suspected fraud ring operating out of the San Mateo County Jail.

Inmates from San Mateo County Jail, San Francisco County Jail and state prison conspired with out-of-custody residents to file 16 fraudulent pandemic unemployment assistance claims in June and July through the state’s Employment Development Department.

The claims resulted in more than $250,000 in fraudulent payments, according to the district attorney’s office.

The claims were filed under the names of 30 San Mateo County Jail inmates who were all incarcerated at the time.

In July, the San Mateo County sheriff’s and district attorney’s offices began investigating the fraud ring after they overheard inmates discuss the operation.

Investigators identified 21 people responsible for 16 of the fraudulent claims, filed between June 9 and July 30. The sheriff’s office collaborated with other police departments to serve multiple arrest and search warrants for the out-of-custody residents involved in the alleged fraud.

During those searches, they recovered $150,000 in cash and continue to investigate other fraudulent payment activity. Current inmates were rebooked on the new fraud charges.

During a preliminary hearing for the first group of defendants, set in San Mateo County Superior Court on Tuesday, Smith pleaded no contest to felony conspiracy to commit EDD fraud.

Smith was sentenced to state prison for four years and eight months. The sentence will be added to Smith’s previous 17-year sentence for voluntary manslaughter and use of a weapon.

Smith’s case was continued to Oct. 20 for the order of restitution, when the court will decide how much he owes the state for the fraud.

Preliminary hearings for other defendants are set for Sep. 23, Oct. 15 and Nov. 6.

On Sep. 4, Freeman Owens, a San Mateo County Jail inmate, also pleaded no contest to counts of fraud and was sentenced to 16 months in prison. Added to his current sentence for murder, Owens’ total sentence is now 97 years to life. Owens’ case is set for Oct. 15 for a restitution report and order.