Some jobless benefits delayed because of fraud investigations

As applications for jobless benefits continue to pile up in Arizona because of the coronavirus pandemic and its associated layoffs, the Department of Economic Security has investigated more than 1,300 cases of fraud.

But sorting out the fraud from the valid claims has delayed benefits for some people who need to have their claim investigated by the overwhelmed department.

The department has found 57 instances where someone stole the identify of a worker and filed a fraudulent claim, according to DES.

DES said in April it was doubling its staff dedicated to investigating fraud and seeking a technology company to identify fraudulent claims.

Fraud can be reported to DES online at https://fraudreferralexternal.az des.gov/.

Patrick Lynch, 34, of Phoenix says he is among those people whose benefits have been delayed because of the number of fraud investigations.

He had worked as a truck driver since 2016 before getting laid off during the pandemic by the small firm where he was employed. He applied for and began receiving weekly unemployment benefits.

But in April, he attended an unpaid training on how to haul double trailers, something he thought would help him return to work.

“Obviously, any training I can get is helpful to my career,” he said.

He reported his training on the weekly claim with DES, he said, in an attempt to be transparent with the agency. DES sent him a letter inquiring whether he was paid for the training, which could reduce his benefits or make him ineligible for benefits that week.

Lynch said he faxed and mailed back the questions sent by DES to inform them he was not paid, but that DES didn’t pay him benefits for that week or those that have followed because the department had to confirm he was not paid for the training.

“I’m frustrated,” Lynch said recently while waiting for DES to clear his claim and resume payments. “I have a family and you know, I applied for rental assistance. Haven’t heard anything back. It’s a really tough time.”

Lynch has two children, 11 and 6, as well as a wife he supports with his paycheck.

“I’m the kind of guy, I love to work,” Lynch said. “I like to show my children the example at home.”

He said he was able to speak with someone at DES, something many callers are unable to do because of the jammed phone lines, and was told the agency needed to assign an investigator to his case to resume payments.

“I asked him what am I supposed to do? I’m going to lose everything in the process of this,” Lynch said. “Arizona should be ashamed of themselves and how they are dealing with this situation.

Me and my family are on the verge of losing everything because they made a mistake and there isn’t anyone else I can contact.”

DES declined to comment on Lynch’s specific case, other than to say the agency would follow up to see whether the issue needs a resolution.

Out of more than 1,000 cases probed, 57 deemed fraudulent

But the agency confirmed it has been busy with investigations.

From April 1 to May 31, there were 1,331 cases of fraud investigated in relation to unemployment insurance, spokesman Brett Bezio said.

With 57 fraud cases found from a broader time period, February to May, that means more than 1,000 people have been investigated for fraud but none was found.

DES has continued to seek convictions for fraud cases that took place even before the pandemic.

From Jan.1, 2020, through March 31, DES saw 73 unemployment-fraud cases result in convictions. The criminal and civil fines and fees from those convictions total $391,112.50, according to DES.

“There were no convictions during the months of April or May as no court dates were scheduled during the pandemic,” Bezio said via email.

Only two of those 73 convictions resulted in jail time for the offenders, one for two months and one for a year, according to DES.

“The DES Office of the Inspector General, alongside the Integrity unit of the UI program, are continuously vetting methods and tools for detecting and preventing identity theft within the Arizona UI program,” Bezio said. “Ensuring the integrity of our programs and safeguarding the personal information of our clients are priorities for our department.”

When the department suspects and investigates fraud, the Arizona Attorney General’s Office handles prosecutions.