“After the CARES Act was passed, the unemployment insurance system became a rich target in a way that it had never been previously,” Amy Simon, deputy assistant secretary at the Department of Labor under the Trump administration, said at the roundtable. States have to put new technologies in place, according to experts, so they can stop the fraud before it happens, rather than try to chase it down and claw it back.

In addition, they’re not equipped to deal with large fraud attacks, particularly the ones coming from overseas. Most states have been struggling to keep up with a record volume of claims due to their outdated systems. In the state of Indiana, for example, nearly 1.3 million claims have been processed for unemployment, and roughly 15 percent of these claims “have been flagged for fraud indicators,” according to Walorski.Ĭlaims for unemployment benefits have surged since the pandemic lockdowns began. Jackie Walorski (R-Ind.) called it “a frightening number” that exceeds “the entire budget of the Department of Homeland Security.”ĭuring a virtual roundtable that she hosted on May 10 with state leaders, employers, and fraud victims, Walorski said that “criminal organizations, including international cybercrime rings, prison inmates, and opportunistic foreign actors are using stolen identities to falsely claim unemployment benefits.” In March, the Labor Department inspector general’s office estimated that more than $63 billion in unemployment benefits had been paid out improperly through fraud or errors since the beginning of the pandemic.

Most states have been hit by fraud committed on a vast scale, mainly by international organized crime rings. WASHINGTON-Generous unemployment benefits put in place by the CARES Act and subsequent relief packages to respond to pandemic-related joblessness have become an easy target for identity thieves and other criminals.

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