A “poorly de­signed” na­tional pro­gram al­lowed “highly ex­pe­ri­enced money laun­der­ers” to take ad­van­tage of “mas­sive holes” to file more than 120,000 fraud­u­lent claims through Illi­nois’ be­lea­guered un­em­ploy­ment ben­e­fits sys­tem dur­ing the coro­n­avirus pan­demic.

That was the as­sess­ment of Gov. J.B. Pritzker on Wed­nes­day, who said that most of those in­stances of fraud — about 107,000 of them — have been com­mit­ted since May through the state’s fed­eral Pan­demic Un­em­ploy­ment As­sis­tance pro­gram for 1099 work­ers and other in­de­pen­dent con­trac­tors such as Uber driv­ers.

Pritzker said the pro­gram, cre­ated through the fed­eral coro­n­avirus re­lief pack­age, left it up to each state to de­velop its own sys­tem.

“As a re­sult, there were mas­sive holes for il­le­gal fraud­sters to steal fed­eral dol­lars from tax­pay­ers across the coun­try,” the Demo­cratic gov­er­nor said dur­ing a COVID-19 brief­ing.

The Illi­nois De­part­ment of Em­ploy­ment Se­cu­rity is work­ing with U.S. De­part­ment of La­bor in­ves­ti­ga­tors and other fed­eral au­thor­i­ties to track down the thieves, Pritzker said.

In the scheme, fraud­sters have used Illi­nois res­i­dents’ per­sonal in­for­ma­tion stolen in sep­a­rate data breaches to ap­ply for ben­e­fits to be paid through direct-de­posit, debit cards and other fi­nan­cial tools em­ployed by le­git­i­mate fil­ers.

“The highly ex­pe­ri­enced money laun­der­ers who have per­pe­trated these crimes use the same pay­ment meth­ods that reg­u­lar fil­ers do,” Pritzker said, so the state can’t cut off “com­mon dis­per­sal mech­a­nisms” that are also used by peo­ple who re­ally need the help.

“De­spite the fact that this is a na­tional pro­gram that was poorly de­signed and sus­cep­ti­ble to fraud, I can prom­ise Illi­noisans that our state govern­ment and our state law en­force­ment au­thor­i­ties will do ev­ery­thing in our power to sup­port any­one who has been af­fected by this na­tion­wide fail­ure,” Pritzker said.

An ad­di­tional 14,500 in­stances of fraud have been iden­ti­fied through the state’s stan­dard un­em­ploy­ment in­sur­ance sys­tem since March.

As of July 23, the statewide un­em­ploy­ment rate was at 14.6%, and 16.4% in the Chicago area.

The fraud has come along with more than 2 mil­lion claims for un­em­ploy­ment ben­e­fits the state has fielded since COVID-19 gripped Illi­nois’ econ­omy, com­pared to 271,000 claims filed all of last year.

That’s led to a mas­sive back­log and thou­sands of peo­ple com­plain­ing of de­lays as the Pritzker ad­min­is­tra­tion has scram­bled to bol­ster the agency’s work­force.

Pritzker warned that any­one who hasn’t re­quested ben­e­fits, but has re­ceived a debit card or un­em­ploy­ment in­sur­ance let­ter in the mail, has likely been a vic­tim of iden­tity theft and a tar­get of the fraud­sters.

Po­ten­tial vic­tims are urged to report fraud on­line at IDES.illi­ Res­i­dents can also re­quest a free credit report through the web­site.


Gov. J.B. Pritzker an­swers ques­tions dur­ing a July news con­fer­ence.

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