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Former State Employee Pleads Guilty to Accepting Bribes to Issue More Than a Half-Million Dollars in Unemployment Checks

FOR IMMEDIATE RELEASE
May 4, 2012

SANTA ANA, California – A former employee at California’s employment agency pleaded guilty this morning to federal bribery charges for taking more than $40,000 in kickbacks in exchange for causing his agency to issue over a half million dollars in unemployment insurance checks to people who were not eligible for such benefits. 

David Paul Holden, 30, of Corona, who previously worked at the Anaheim office of the state Employment Development Department (EDD), pleaded guilty this morning to one count of conspiracy and one count of bribery.

Holden pleaded guilty before United States District Judge David O. Carter, who is scheduled to sentence Holden on August 27. As a result of today’s guilty pleas, Holden faces a statutory maximum sentence of 15 years in federal prison.

By pleading guilty, Holden admitted that he was personally responsible for obtaining more than $500,000 in unemployment benefits for more than 50 ineligible persons. Holden collected more than $40,000 in cash kickbacks from the ineligible workers he had contacted through a network of recruiters.

Four of those recruiters were charged with conspiracy to commit bribery and embezzlement. They are: Ulysses Hernandez, 25, of Fontana; Zaharid Hernandez, 26, of Bloomington; Cristobal Salgado, 26, of Moreno Valley; and Melissa Salgado, 25, of Moreno Valley. Cristobal and Melissa Salgado have pled guilty. The cases against Ulysses and Zaharid Hernandez are still pending.

Two other recruiters were named in the grand jury indictment along with Holden: Narciso Rodriguez, 29, of Riverside and Patricia Cordova, 31, of Anaheim. Rodriguez has agreed to plead guilty on May 14. Cordova is currently scheduled to go on trial on bribery, conspiracy and witness tampering charges on June 26.

“The kickback scheme orchestrated by Mr. Holden abused the public trust and threatened the integrity of a program designed to help unemployed people in need of assistance,” said United States Attorney André Birotte Jr. “The public should know that bribery and graft will be painstakingly investigated and aggressively prosecuted by the Department of Justice.”

According to court documents, Holden worked at the EDD office in Anaheim, where he processed unemployment insurance claims and had access to EDD’s electronic database for approving claims and making payments of unemployment benefits. Both personally and through a network of recruiters, Holden approached more than 50 individuals and persuaded them to provide their social security numbers and other information so that Holden could arrange for them to receive unemployment checks. These people were not qualified from receiving unemployment benefits because, for example, they were already employed, had voluntarily quit their jobs or had been terminated for misconduct. Holden then manipulated EDD’s electronic database to make it appear that these people were entitled to benefits and caused EDD to issue checks to those persons. In return for the unemployment benefits, the recipients each gave the recruiters cash payments of up to $5,000, and much of the money was then passed on to Holden.

As part of his plea agreement, Holden specifically admitted that he arranged for one person to receive unemployment checks even after that person moved to Texas and began working at a new job. Holden, who had access to the unqualified recipient’s bank account, personally deposited the checks into that account, and then transferred the money back to his own account.

The investigation in this case is being conducted by the U.S. Department of Labor’s Office of Inspector General and EDD’s Investigations Division.

Release No. 12-058

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