Fraudster used same Social Security number to collect over $220k in jobless payments in 29 states
A fraudster used the same Social Security number to apply for unemployment benefits in 50 states and was able to successfully collect jobless payments worth $222,532 in 29 states, according to the federal government's pandemic oversight monitors.
"State workforce agencies that are a part of the National Association of SWAs Integrity Data Hub could have the ability to crossmatch UI data with other states," read a report from the Pandemic Response Accountability Committee (PRAC). "But as of December 2020, just 32 of 54 SWAs used or partially used the Integrity Data Hub. If a SWA does not have access to another state's UI data, it is limited in its ability to perform multi-state analyses similar to DOL OIG."
The state of Arizona paid out a whopping $1.6 billion to individuals with stolen identities, California paid more than $1 billion in fraudulent claims, and Michigan made almost $4 billion in "overpayments to ineligible claimants," according to the PRAC report, Key Insights: State Pandemic Unemployment Insurance Programs.
"Michigan's Auditor General emphasized that the SWA [State Workforce Agency] will likely be unable to recover the overpayments as the SWA was at fault, not the claimants," the watchdog report found.
Under the March 2020 CARES Act and subsequent stimulus laws, Congress allowed independent contractors to collect weekly unemployment benefits for the first time. A federal bonus payment was added on top of state jobless payments.
The expansion of eligibility for jobless benefits to self-employed individuals created a "once in a lifetime opportunity for every scammer, fraudster and thief in the world," said an identity theft expert in the Indiana Attorney General's office.
The federal government reported the fraud statistics after examining "more than 40 reports from 16 states" to see how they handled jobless benefits at the onset of the pandemic.
The U.S. Department of Labor Inspector General in July of 2021 determined that an estimated $90 billion was paid in fraudulent or improper unemployment benefits during the COVID-19 pandemic.