$11.4 Billion in Unemployment Fraud During Pandemic

California officials said Monday they have confirmed that $11.4 billion in unemployment benefits paid during the COVID-19 pandemic involve fraud — about 10% of benefits paid — and another 17% are under investigation.

In addition to the confirmed fraud, the state Employment Development Department has stopped tens of billions of dollars in payments on bogus claims through tougher security measures adopted since last fall, according to state Labor Secretary Julie Su.

“There is no sugarcoating the reality,” Su said during a press conference Monday. “California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”

California has paid out $114 billion in unemployment benefits since March 2020, when the state stay-at-home orders caused many businesses to close or reduce operations, putting millions out of work. Some 19 million claims have been processed by the agency.

In addition to the 10% of benefits confirmed to involve fraud, the state is investigating another 17% of benefits involving suspicious claims that have not yet been proven to be fraudulent — about $19 billion worth.

Officials said a large number of those claims could end up being fraudulent as well.

Su said part of the blame goes to the Trump administration, which she said failed to provide adequate guidance and resources to California to counter fraudulent claims, almost all of which were filed through a new federal program that provides unemployment benefits to gig workers, independent contractors and the self-employed.

The press conference was held on the eve of the release of a state audit that is expected to be critical of California’s delays in providing unemployment benefits.

“It should be no surprise that EDD was overwhelmed, just like the rest of the nation’s unemployment agencies,” Su told reporters during a conference call. “And we now know that as millions of Californians applied for help, international and national criminal rings were at work behind the scenes working relentlessly to steal unemployment benefits using sophisticated methods of identity theft.”

Read the rest at: latimes.com


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