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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of California

FOR IMMEDIATE RELEASE
Friday, October 3, 2014

EDD Employee Sentenced To 2.5 Years In Prison For Disability Fraud

SACRAMENTO, Calif. — An employee of the Employment Development Department and a co-defendant for a scheme to defraud the EDD Disability Insurance Program, United States Attorney Benjamin B. Wagner announced.

EDD employee Simeon Shawnise Gregory, 35, of Moreno Valley, was sentenced to two years and six months in prison, and Terrance Rychan Smalls, 32, of Moreno Valley, was sentenced to six months in prison and six months home confinement. Earlier this year, co-defendants Sarah Elizabeth Trout, 35, of Riverside, was sentenced to five months in prison and five months of home detention, and Theresa Helena Campbell, 37, of Riverside, was sentenced to 18 months in prison.

According to court documents, Gregory used her position as an EDD Disability Insurance Program Representative to improperly process and manipulate the claims of Trout, Campbell, Smalls, and others. In return for fraudulently extending her disability claim, Trout paid Gregory up to half of her disability benefits. For Campbell and Smalls, Gregory caused EDD to issue specific payments, inactivated warning flags, and forged doctor’s certificates regarding the claimed disability. For Campbell, Gregory found an innocent individual with Campbell’s same name and used that individual’s legitimate wages to get Campbell fraudulent benefits. Gregory’s actions disabled the checks and balances that allow EDD to discover fraudulent claims. As a result of this scheme, the defendants defrauded the State of California of more than $360,000.

“Today’s sentencing highlights EDD’s continuing efforts to actively pursue and prosecute fraud against the California Disability Insurance program. The defendant in this case violated our public trust by participating in a complex scheme to defraud a vital program that serves as a lifeline for millions of disabled workers. It’s intolerable,” said Patrick W. Henning Jr., director of the California Employment Development Department (EDD). “Our Investigation Division is committed to working with our law enforcement partners to safeguard this and other EDD programs. Though this is a rare transgression not at all reflective of our dedicated staff, we take aggressive action whenever and wherever fraud is found.”

This case was the product of an investigation by the Employment Development Department, Investigation Division. Assistant United States Attorney Jared C. Dolan prosecuted the case.
Press Release Number: 
Docket #: 2:12-cr-364 GEB
Updated April 8, 2015