Fraud probe slows jobless benefits
The state’s crackdown on fraud involving a federally funded unemployment benefit is harming those who legitimately and desperately need the money to survive the coronavirus pandemic, social services advocates say.
The investigation couldn’t come at a worse time for the unemployed, the advocates say, given the expiration of the extra $600 a week federal benefit.
“It puts people in almost a homeless situation,” said Michelle Wrona Fox, an attorney with Community Legal Aid Services in Youngstown.
“This is not about regular workers collecting unemployment defrauding the unemployment system . ... They are taking the hits,” said Maurice Emsellem, program director for the National Employment Law Project.
The Ohio Department of Job and Family Services has put a hold on 270,000 claims for benefits under the federal Pandemic Unemployment Assistance program while they’re being investigated for possible fraud. Of that number, more than 95% of the claims — representing an estimated $200 million each week — have been flagged.
The federal program is designed for those normally ineligible for benefits, including “gig workers” such as ridesharing drivers, low-wage employees, contract workers and others.
The potentially fraudulent claims represent nearly a third of the 810,000 claims filed under the program. About 2,000 claims have been released for payment.
Potentially millions of dollars of benefits have been wrongfully paid to criminals, Ohio officials say. Other states also have been victimized by criminals.
To prevent additional fraud, the state is requiring a second, more comprehensive round of identity verification that many workers’ advocates say can be onerous.
“We know there are people who can’t pay their mortgages — and worse — because they’re not getting these benefits,” said Zach Schiller, research director at Policy Matters Ohio. “It’s not as if everything else vanishes because fraud is suspected.”
People trying to get their stalled claims processed have been asked to provide potentially hard-to-find documentation such as additional photo identification, birth certificates, old tax returns, copies of leases, proof of marriage status and information about dependents, advocates say.
“They are asking for really significant additional information, to the point where a lot of people can’t do it,” Schiller said.
States affected by the fraudulent actions have an obligation to protect taxpayer dollars, but they also have to make sure they’re putting sufficient resources into getting people paid as quickly as possible, Schiller said.
It also appears that payments set up for deposit to nontraditional banking accounts, which are more often used by low-income workers, were targeted.
“(The criminals) saw vulnerabilities,” said Lisa Hamlerfugitt, executive director of the Ohio Association of Foodbanks. “It looks like they might not have used the brick-and-mortar banks; they used those electronic debit cards.”
Nikki James, 39, of Columbus, was collecting the pandemic benefit along with state unemployment benefits when they suddenly stopped July 23.
She spends her days on the phone with Job and Family Services trying to get answers about her claim. At one time, she was told she needed to provide tax forms though she had already done so, an indication that her claim might have been caught up in the fraud investigation.
“I email tech support. I get no answers back,” James said. “I’m told, ’Sit right by your phone, they’re calling you right back.’ Nope.”
On top of that, the state has asked for the return of the benefits she has collected, which total about $15,000, she said.
James is diabetic and has lupus. She is concerned about getting sick should she go back to work. She wouldn’t typically be eligible for unemployment benefits because she is a self-employed contractor who cleaned Airbnb homes.
The $600 federal weekly benefit she received along with the $336 a week state benefit had allowed her to provide for her 9- and 16-year-old daughters. She collected the benefits through a debit card provided by the state.
“This is so depressing because I’ve worked my whole life. I’ve worked since I was 14,” she said.
“We know there are people who can’t pay their mortgages — and worse — because they’re not getting these benefits. It’s not as if everything else vanishes because fraud is suspected.”
Without money, she is getting nagged by creditors and, because of COVID-19, it’s been hard to get help from charities.
“There’s no hope in sight. I can’t get no straight answers,” James said.
On the other side is a worker who received two unemployment checks last week, one for $600 and one for $480. The problem is that he never filed for unemployment benefits.
The worker, who asked not to be identified for fear his name could be used in a subsequent fraudulent claim, said he received a letter in May from the state telling him how to access his unemployment benefits. The worker called the state numerous times and filed a police report, telling officers that a fraudulent unemployment claim had been filed in his name.
He thought the issue had been resolved until the checks arrived last week.
“Tried NUMEROUS times to call and fax information to Ohio indicating the unemployment claim was fraudulent,” he said in an email. “Faxes say ‘communication error’ and no one answers the phone.” mawilliams@dispatch.com @Bizmarkwilliams rprice@dispatch.com @ritaprice