Estimates of epidemic unemployment fraud amount to 46.5 billion dollars

A federal watchdog found Thursday that fraudsters may have stolen $45.6 billion from the nation’s unemployment insurance program during the pandemic, using Social Security numbers for the dead and other methods to deceive and corrupt the US government.

The new estimate is a dramatic increase from about $16 billion in potential fraud identified a year ago, and it illustrates the enormous task still awaiting Washington as it seeks to identify losses, recover funds, and hold criminals accountable for theft from a massive collection. A group of federal relief programs.

The report, released by the Labor Department’s inspector general, paints a grim picture of the country’s unemployment assistance program that began under the Trump administration in 2020. Weekly benefits have helped more than 57 million families in the first five months of the crisis — however, the program quickly emerged as a tempting target for criminals.

To steal the money, scammers allegedly filed billions of dollars in unemployment claims in multiple states at once and relied on suspicious emails that are hard to track. In some cases, they used more than 205,000 Social Security numbers belonging to the dead. Other suspected criminals gained benefits by using inmates’ identities who did not qualify for assistance.

But officials at the Probation Office cautioned that their calculations may still be incomplete: They said they were unable to access more updated federal prisoner data from the Justice Department, and acknowledged that they focused their report only on “high-risk” areas of fraud. Both factors raised the possibility that billions of dollars in additional thefts would be uncovered in the coming months.

The government also announced Thursday that it had reached a “milestone” of 1,000 individuals charged with crimes related to unemployment benefits during the pandemic. Kevin Chambers, the Justice Department’s director of coronavirus enforcement, described the situation in a statement as “unprecedented fraud.” Meanwhile, the inspector general’s office said it has opened nearly 190,000 investigations related to unemployment insurance fraud since the start of the pandemic.

When asked about the findings, a Department of Labor spokesperson referred to a response letter from the agency included in the inspector general’s report. The agency said it was “committed” to helping states “combat new and ever-changing types of complex fraud affecting the user interface system.” He referred to grants and other recent directives aimed at helping states improve their systems for awarding and controlling claims.

Covid money trail

This was the biggest explosion of emergency spending in US history: two years, six bills and more than $5 trillion aimed at breaking the deadly grip of the coronavirus pandemic. The money saved the American economy from ruin and put vaccines into millions of guns, but it also led to unprecedented levels of fraud, abuse, and opportunism.

In a year-long investigation, The Washington Post is following the money-hungry trail to find out what happened to all that money.

Read more

A new report on unemployment fraud highlights the ongoing challenge facing the federal government, two years after it approved its first nearly $5 trillion in response to the worst economic crisis since the Great Depression. That money helped save the economy from collapsing early in the pandemic, but it quickly became a ripe target for waste, fraud and misuse, as The Post has documented in a year-long series on spending tracking called Covid Money Trail.

The scope of this theft was wide: Earlier this week, federal prosecutors indicted 47 defendants in an entirely different scheme targeting a software program. Providing free meals to children in need. The organization, Feeding Our Future, allegedly stole more than $250 million from the meal program in what the Department of Justice called the largest single fraud case targeting coronavirus aid to date.

The federal investigators have the same Raised alarms and chased accusations Involving nearly $1 trillion in loans and grants Designed to help small businesses. But theft isn’t the only problem: in some cases, generous government aid has proven ineffective or helped finance pet projects It has nothing to do with tackling the coronavirus, The Post has found. Republican conservatives, for example, have benefited from a $350 billion program intended to bolster their response to the crisis in order to A wide range of controversial political issues, including tax cuts And the immigration campaigns.

Beginning in 2020, Congress expanded unemployment benefits to meet the scale of the crisis. Lawmakers have allowed a wide range of unemployed Americans, including contractors to temporary economy firms such as Uber, to collect jobless aid for the first time. Washington has repeatedly increased the size of these checks, at one point providing an additional $600 in weekly payments.

Applications – amid historical unemployment – quickly overwhelmed the government workforce agencies running the program. Many of these agencies have been neglected for years, with underfunded employees relying on decades-old computers to process a historic number of requests for financial support. As a result, millions of Americans experienced massive delays in receiving aid, creating chaos that fraudsters easily exploited, with many stealing innocent Americans’ identities to obtain weekly checks in their name.

‘A magnet for artists willing to steal’: Fraud steals billions in pandemic unemployment benefits

“Hundreds of billions of dollars in anti-pandemic funds have attracted fraudsters seeking to exploit user interface software — resulting in historic levels of fraud and other incorrect payments,” Larry Turner, inspector general for the Department of Labor, said in a statement.

Studying the program between March and October 2020, the inspector general initially found more than $16 billion of potential fraud in key high-risk areas. But the watchdog recently began warning that the total could rise, possibly dramatically. Certificate to Congress In March, Turner said there could have been $163 billion in overpayments, a term that includes fraud as well as money erroneously sent to innocent Americans. The amount was a projection, based on a sample of federal spending to calculate the total money wrongly spent out of the nearly $900 billion in unemployment payments made during the pandemic.

On Thursday, federal watchdogs coupled their latest estimates with fresh criticism of the Labor Department, raising concerns that investigators’ access to government unemployment data – to find more fraud – may be at risk after 2023. The problem, which stems from an internal government dispute that The Post reported this yearHe has previously urged the inspector general to sound alarms about his ability to conduct oversight.

But the Labor Department in its official response called the dispute “unfair”, citing the fact that it still had to review existing regulations. Separately, a White House official said Thursday that the administration is working to address the problem with access to the data. The individual spoke on condition of anonymity to describe the private discussions.

The sheer scale of the theft has already sparked a flurry of federal enforcement action, including this week, when a federal court A man from Illinois was sentenced to 39 months in prison for fraud in obtaining unemployment benefits while in prison. Likewise, the Biden administration has ramped up its work to address the problem, including by considering new government policies aimed at eliminating identity theft in federal programs.

On Capitol Hill, Senator Ron Wyden (D-Ore), who chairs the Senate Finance Committee, praised “robust efforts to identify criminals.” But the senator on Thursday stressed the need for legislative reform of the unemployment benefits system.

“I have said for a long time that we need a national set of technology and security standards for state systems to better prevent this type of fraud, and we will continue to work to pass our reforms,” he said.

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