Balkar Singh, 50, Harvinder Kaur, 37, and Harjinder Kaur Thandi, 34 of Yuba City were all arrested and arraigned Tuesday, and six other defendants will appear in court at a later date. This is the third indictment in an ongoing investigation by the FBI, the United States Department of Labor and California's Employment Development Department.

"Fraud against the employer-funded Unemployment Insurance program or the employee-funded Disability Insurance program costs all of us and will not be tolerated," Pam Harris, director of the EDD, said in statement.

The federal government and states overpaid an estimated $14 billion in unemployment benefits in fiscal 2011, or roughly 11% of all the jobless benefits paid out, according to reports from the U.S. Labor Department. Most of those overpayments are considered mistakes.

About $1.4 billion in overpaid state benefits were attributed to fraud.