[ad_1]
COLUMBUS, Ohio (AP) – As the floodgates are expected to open on another round of unemployment aid, states are hammered by a new wave of fraud as they scramble to update security systems and block the crooks who have already siphoned billions of dollars from the pandemic – related unemployment programs.
Fraud scams taxpayers, delays legitimate payments, and turns thousands of Americans into unintentional victims of identity theft. Many states have failed to adequately protect their systems, and an Associated Press review reveals that some will not even publicly acknowledge the extent of the problem.
The massive sham stems from past identity theft from banks, credit rating agencies, healthcare systems and retailers. Fraudsters, sometimes in China, Nigeria, or Russia, buy personally identifying information stolen from the dark web and use it to flood state unemployment systems with misrepresentation.
The US Department of Justice is investigating unemployment fraud by “transnational criminal organizations, sophisticated domestic actors and individuals across the United States,” said Joshua Stueve, spokesperson for the department’s criminal division.
The Office of the Inspector General of the Ministry of Labor estimates that more than $ 63 billion has been poorly paid by fraud or errors – around 10% of the total amount paid under unemployment programs linked to the coronavirus pandemic since March .
“We are all learning that there is an epidemic of fraud,” said US Representative Kevin Brady of Texas, the Republican rank on the powerful House Ways and Means Committee. Brady said the estimate of $ 63 billion “is higher than the entire Homeland Security Department budget.”
“These are frightening levels of fraud,” he said.
California has been the biggest target, with around $ 11 billion in fraudulent payments and an additional $ 19 billion in suspicious accounts. Colorado has paid out almost as much to crooks – about $ 6.5 billion – as to people who filed legitimate unemployment claims.
Other estimates, according to AP reports across the states, range from several hundred thousand dollars in smaller states such as Alaska and Wyoming to hundreds of millions in more populous states such as Massachusetts and Ohio.
Nationwide fraud has been fueled by two vulnerabilities: a flood of unemployment benefit claims since the start of the pandemic that has overwhelmed state unemployment agencies and outdated benefit systems that are easy prey for cunning and persistent criminals.
In Ohio, the first weekly jobless claims ranged from 17,000 to over 40,000 during the pandemic. But since the end of last month, those claims have exceeded 140,000 in some weeks, many of them considered fraudulent. The state paid at least $ 330 million in fraudulent unemployment benefit claims in the event of a pandemic.
Trying to catch so many bogus claims is delaying payments to people in Ohio who are in legitimate need of help. In a suburb of Columbus, Upper Arlington, Cynthia Sbertoli was paid $ 228 a week after she was fired in March from her job at a non-profit organization that runs high school student exchange programs.
His benefits were suspended in January after informing the state that someone had attempted to use their identity in a scam to claim benefits. She thought the issue was resolved but has yet to see her benefit checks renewed, which she and her husband are using to help pay for a son’s vision and hearing therapy.
“It’s just not a good way to take care of people,” said Sbertoli, 49.
In Indiana, Kentucky and Maryland, officials said that during certain weeks in the new year, at least two-thirds of claims received were classified as suspicious due to issues with identity verification. This is not the first contact with serious fraud for Maryland. In July, officials said they discovered a massive criminal enterprise that had stolen more than $ 500 million in unemployment benefits.
Among the states that have been hit hardest are those participating in the Pandemic Unemployment Assistance Program adopted by Congress last year. It’s been a lifeline for unemployed freelancers and construction workers who don’t normally qualify for UI, but it’s also a boon for criminals who use stolen identities to make claims. Almost 800,000 of the 1.4 million claims Ohio has received under this program have been tagged for potential fraud.
Scams are so prevalent that the US Department of Justice is putting money aside to hire more prosecutors. In New York alone, the Department of Labor says it has referred “hundreds of thousands of fraud cases” to federal prosecutors. The state says it has blocked $ 5.5 billion in fraudulent claims, while New Jersey says it has kept $ 2.5 billion from flowing into the hands of criminals.
Despite these efforts, a government watchdog agency says too few states are taking the necessary steps to prevent fraud.
In its memo last week, the Office of the Inspector General of the United States Department of Labor said that at the end of last year, 22 of the 54 state and labor agencies territories were still not following his repeated recommendation to join a data exchange run by the National Association of State Workforce Agencies.
This system is designed to check Social Security numbers used in claims to see if they are used in multiple states or if they are related to deceased people or other scam methods. The office said it found $ 5.4 billion in fraudulent payments from March through October.
Most of that, $ 3.5 billion, came from claims using the same social security numbers in multiple states. A number was used for claims in 40 states. Twenty-nine of the states paid for these claims, for a total of over $ 220,000.
“The ministry must take immediate action and step up efforts to ensure that (states) implement effective controls to mitigate fraud in these high-risk areas,” the labor officials warned.
People whose identity is used to claim undue advantages often do not find out until they have received their tax returns.
Andrew Heidtke received a letter in September from the Wisconsin Department for Workforce Development advising him that jobless claims he had never applied for were being processed.
“I had no idea what was going on,” said Heidtke, who works as an administrative assistant for an engineering lobbying organization. “At first I just thought it was spam.”
Another victim was Harry Hollingsworth, 99, of Strongsville, Ohio. The retired elevator car factory worker received a form at the end of January indicating that he had received $ 3,156 in benefits. Hollingsworth recently passed away, and his son Jim Hollingsworth said the bogus claim created a big problem.
“It looks like the state, they completely dropped the ball,” he said.
In its own survey of state governments, the AP found that many do not publicly disclose the level of fraud. Some officials have expressed concern that providing information, no matter how general, could give criminals the opportunity to further exploit their systems.
President Joe Biden’s administration is pledging to cut unemployment fraud even as it tries to extend benefits until September. Under previous legislation, the administration is sending $ 200 million to states to fight it.
It would be welcome in Virginia, where House Minority Leader Todd Gilbert, a Republican, has said the Legislative Oversight Agency should investigate how the state authorized $ 40 million. dollars in bogus payments through inmate-related scams.
“How many desperate people, fired through no fault of their own, could have been helped with this money?” He asked. “It’s maddening.”
____
Mulvihill reported from Cherry Hill, New Jersey.
___
Associated Press writers Kimberlee Kruesi in Nashville, Tennessee; Sarah Rankin in Richmond, Virginia; Todd Richmond in Madison, Wisconsin; and Casey Smith in Indianapolis contributed.
[ad_2]
Source link