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BRENTWOOD, Calif. (KGO) -- The huge unemployment fraud scandal at the EDD has reached into the lives of ordinary citizens, many of whom had no idea scammers were using their stolen identities to file phony claims until they received a surprise from the EDD -- a tax form saying they owe income taxes on the benefits fraudsters claimed in their names.

Among them is a retired couple in the East Bay town of Brentwood, Frank and Linda Rezac, who find themselves battling an unresponsive bureaucracy at the EDD. The couple tried for months to warn the EDD someone was stealing unemployment benefits. Instead, the EDD kept paying the scam account.

Now the couple is saddled with the tax bill. A form 1099-G from the EDD just arrived in the mail saying they owe income taxes on a staggering amount -- $25,200 that the scammer claimed in Frank's name.

"The fact they are so unresponsive is what's angering," Frank Rezac said. "Now we have this huge cloud looming over us. Tax on that amount will be $7,000 or $8,000. A steep financial hit."

However, in their quest to get EDD to correct that 1099 saying they didn't get the money, the couple made a surprising discovery: They found the stolen EDD money that the bureaucrats failed to protect. Now they find themselves the guardians of this money -- as EDD still hasn't responded to their frequent alerts.

"It was a shock," Linda Rezac said of finding the money. "But a nice shock."

Their strange odyssey began five months ago. They were enjoying a quiet retirement in leafy Brentwood, playing golf, taking strolls, when out of the blue Frank got a notice from the EDD.

Absurdly, the notice granted Frank pandemic unemployment benefits of $167 per week, based on a salary of $80,000 per year.

"And I've been retired since 2002," Frank said. Of course he never applied for benefits. He hasn't worked in 20 years.

Immediately he wrote back to the EDD, saying he never filed for unemployment and EDD should cancel whatever claim was there.

Instead, the EDD increased his benefits. Two days later, Frank received a second notice awarding him $450 per week for 39 weeks.

"That's when I told them we never applied for unemployment," Rezac said, "thinking that would solve their problem. It didn't."

His letter to EDD said someone apparently was using his Social Security number to file a fraudulent claim. Rezac asked the EDD to investigate and report back to him.

No one ever did. Instead, the EDD ignored his warnings and sent him a debit card so he could cash in those benefits.

"It's unbelievable that a government office, department, can operate this way that they don't listen to what people are telling them," Linda Rezac said.

"We just cut up the card we didn't activate it," Frank Rezac added. They figured cutting up the card would solve the problem.

It didn't.

Four months later, they got that 1099-G, saying they owe those income taxes. That was the first time they realized the EDD paid $25,200 into the scammer's account.

"Now we're getting slammed with the taxes," Frank Rezac said.

"And we didn't even get the $25,000," Linda added.

The couple figured the scammer must have gotten away with the money. When they called 7 On Your Side for help, we suggested they check the account anyway.

So they did.

"It was there!" Linda Rezac said.

Indeed, they found all the money sitting snug in the account -- all $25,200. What's more, the bank records show that the EDD kept depositing money into the account long after the couple reported it was a fraudulent claim.

"We were just relieved that nobody could say we took the money," said Linda.

They figured their problems were solved. They'd return the funds, the EDD could correct the 1099 and life could go back to normal.

Again, it didn't.

They tried to contact EDD to take back the funds. They've not heard back. Even a state legislator's attempts to alert the agency - and those of 7 On Your Side - have been met with silence.

The EDD tells 7 On Your Side only that: "We have received your request and will get back to you."

Now the couple find themselves guarding those taxpayer dollars, worried the scammer may try to grab the money.

"We've frozen the account so no one else can use it," Frank Rezac said.

"I have the PIN and the password so it's protected," Linda assured us.

It's a job they say the EDD should be doing. A state audit in January said the EDD assigned only two staffers to respond to public reports of fraud, and alerts like those of the Rezacs went nowhere.

"I'm 80, my wife is 70, we don't need this stress and this hassle," Frank Rezac said.

"I feel like we are working awfully hard to solve a problem that we didn't start," Linda Rezac added.

"All I want is a corrected 1099 that says zero, zero, zero," Frank Rezac said. Linda chimed in: "And for them to take their money back."

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

Have a question for Michael and the 7 On Your Side team? Fill out the form HERE! 7OYS's consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area. We assist individuals with consumer-related issues; we cannot assist on cases between businesses, or cases involving family law, criminal matters, landlord/tenant disputes, labor issues, or medical issues. Please review our FAQ here. As a part of our process in assisting you, it is necessary that we contact the company / agency you are writing about. If you do not wish us to contact them, please let us know right away, as it will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.

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Dognapper gang drag woman out of car by her hair as 10 pups stolen a DAY in UK

A DOGNAPPER gang dragged a woman out of her car by her hair as they attempted to steal her pup.

It is one of a string of dog snatches which sees 10 stolen every day in the UK.

5Ten dogs are are stolen in the UK every dayCredit: Facebook/Melina Georgiou

The woman was targeted in Sheffield last Monday at 2pm, The Mirror reports.

A van driver got out of his vehicle, approached her car and demanded she hand over her dog - a Lhasa Apso.

She refused, so the man grabbed her by the hair through the open window and yanked her out of the car.

The victim fell to the ground and suffered bruising and cuts to her knees while the man got back in this van and sped off.

Two men, aged 30 and 33, were arrested this week on suspicion of attempted robbery and remain in custody.

In a separate incident, a "devastated" dog owner is pleading for the return of her pet after carjackers made off with a dog walker's van in New Barnet, north London, on February 18.

There were three dogs inside the vehicle, which was taken at around 1pm.

Two were later dumped - one of them called Chester, who is terminally ill with cancer and was left near flats in Kent.

But a one-year-old Matlipoo named Nala is still missing.

Her owner, Marina Pettigrew, has launched a nationwide appeal to find her.

5One-year-old Maltipoo Nala was taken in New Barnet, north London, on February 18Credit: Facebook/Melina Georgiou 5Her owner's niece, Melina Georgiou, desperately wants her homeCredit: Facebook/Melina Georgiou

She said the dog walker had got out of the vehicle to drop one of the animals home when the thieves "jumped in her van and drove off with Nala and two others".

Her niece, Melina Georgiou, 27, said: "Nala is our family dog.

"We are grieving and it’s an emotional roller coaster. It will traumatise us forever but it’s worse for her.

"The thought she thinks we’ve abandoned her or she’s being treated badly is horrendous.

"She comes from such a loving home, she has so many people that love her.

"There’s no way in hell we are going to give up looking for her. They’ve messed with the wrong family."

Melina said her family paid £1,400 for Nala but she has seen Maltipoos being sold online for £4,000, which she thinks is part of the problem.

In a message to dog thieves, she said: "Please, she’s spayed, she just needs to be back safe with her family where she was happy."

5Melina says the dognappers have "messed with the wrong family" 5Nala's owners have launched a nationwide appeal to find herCredit: Facebook/Melina Georgiou

It comes after reports that dognapping gangs are targeting women walking their pets alone as the value of their dogs soars in lockdown.

Pedigree pups can fetch up to £3,500 on the black market as breeders struggle to keep up with demand.

The value of chow chows, dachshunds, pugs and bulldogs is said to be up 75 per cent since March, with the price of a pug almost doubling from £684 to £1,220.

According to the Dogs Trust, French bulldogs have seen a similar leap in value, shooting from £1,251 to £2,128.

Justine Quirk from Dog Lost, the UK's largest lost and found dog service, said: "I am quite shocked. Thefts have shot up due to the puppy prices.

"I have two cockapoos which I bought for £550 and £850. Now mine are worth £6,000.

"Now, when I’m walking around, I’m actually scared, if they are in the garden I feel like I have to have my eyes on them all the time.

"These families who’ve had their pets stolen, are absolutely destroyed."

The RSPCA said they are hearing of more attacks on lone dog owners, describing the situation as "worrying".

Dogs Lost reported a 170 per cent increase in the number of dogs missing across the UK since the start of the pandemic.

And Debbie Matthews, from the Stolen and Missing Pets Alliance, estimates ten are being snatched a day.

Sir Bruce Forsyth’s daughter told The Mirror: "When lockdown happened everyone wanted a puppy so immediately that put prices up.

"At the start people had their names down for a £1,000 puppy but they were being gazumped with someone offering £2,500.

"It is the biggest crime during Covid but many people are still unaware.

"Before lockdown about six dogs a day were stolen we estimate that’s now about ten dogs a day in the UK."

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She added: "It’s important for the public at large to be vigilant when out walking their dogs.

"Be dog theft aware. Nowhere is safe from these monsters."

Justine urges owners to vary their route, try to walk with others, don’t wear headphones or be on the phone.

But she points out the most common place for your dog to be stolen is from the back garden.

It also follows singer Lady Gaga's dog walker, Ryan Fischer, being shot while trying to fend off dognappers in West Hollywood.

Lady Gaga’s dog walker screams ‘help me, I'm bleeding out’ after being shot by dognappers in upsetting video

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