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Scammers Stole an Insane Amount of Pandemic Unemployment Money

According to a new Department of Labor Inspector General report, scammers were able to steal nearly $46 billion in pandemic cash through state unemployment insurance [UI] programs. 


"Inspector General Larry D. Turner, U.S. Department of Labor (DOL), announced that the Office of Inspector General’s (DOL-OIG) investigations have resulted in more than 1,000 individuals being charged with crimes involving Unemployment Insurance (UI) fraud since the beginning of the COVID-19 pandemic in March 2020.1 The DOL-OIG also issued an Alert Memorandum identifying $45.6 billion in potentially fraudulent UI benefits paid to individuals with Social Security numbers: (1) filed in multiple states, (2) of deceased persons, (3) filed with suspicious email accounts, and (4) of federal prisoners," the Office of the Inspector General released this week.

The office also found pandemic relief programs were vulnerable for abuse given how much money the federal government was quickly pushing out the door without proper accountability and tracking programs or mechanisms in place. 

"Following the start of the pandemic in the United States in early 2020, unemployment compensation claims rose exponentially to historically unprecedented levels. Prior to the pandemic, numbers of UI claims were historically low. On March 14, 2020, the Department reported 282,000 initial claims. Within 2 to 3 weeks, initial claims rose to 10 times pre-pandemic levels, far higher than state systems were designed to handle. Within 5 months, through August 15, 2020, the Department reported 57.4 million initial claims, the largest increase since the Department began tracking UI data in 1967. The CARES Act provided significant funding to the federal-state UI program, which resulted in hundreds of billions of dollars in additional payments," the office explains.


"The unprecedented infusion of federal funds into the UI program gave individuals and organized criminal groups a high-value target to exploit. That, combined with easily attainable stolen personally identifiable information and continuing UI program weaknesses identified by the OIG over the last several years, allowed criminals to defraud the system," the office continues. "Because many states were not prepared to process the extraordinary volume of new UI claims and struggled to implement new UI programs, some internal controls that had been traditionally used or recommended for the processing of UI claims were not initially implemented. This created a high-reward target where an individual could make a fraudulent claim with relatively low risk of being caught. As time went on, one fraudster could have been issued several UI debit cards, with tens of thousands of dollars on each card."

Meanwhile, Democrats on Capitol Hill continue to push for even more COVID-19 related spending, despite President Joe Biden admitting the pandemic is over. 


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