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The Times Herald (Norristown, PA) - - BUSINESS -

The grow­ing con­cerns about fraud­u­lent ap­pli­ca­tions have fo­cused mainly on a new pro­gram, Pan­demic Un­em­ploy­ment As­sis­tance. This pro­gram made self-em­ployed peo­ple, gig work­ers and con­trac­tors el­i­gi­ble for job­less aid for the first time.

But the pro­gram has been tar­geted for fraud in many states and has also dou­ble-counted many ben­e­fi­cia­ries. Last week, Cal­i­for­nia cut in half the num­ber of peo­ple re­ceiv­ing ben­e­fits un­der PUA, likely af­ter purg­ing dou­ble-counts. It now says 3.4 mil­lion peo­ple are re­ceiv­ing the aid, down from 6.4 mil­lion the pre­vi­ous week.

And first-time ap­pli­ca­tions for ben­e­fits, which gen­er­ally re­flect the pace of lay­offs each week, of­ten in­clude left­over claims from pre­vi­ous weeks.

Christo­pher Thorn­berg, a founder of Bea­con Eco­nom­ics, an eco­nomic con­sult­ing firm, says all the new pro­grams to pro­vide aid have taxed most states’ un­em­ploy­ment agen­cies and made the data less reli­able.

“It’s kind of the Wild West,” Thorn­berg said. “I have just largely dis­missed this data.”

Sharon Hil­liard, direc­tor of Cal­i­for­nia’s Em­ploy­ment Devel­op­ment De­part­ment, said her agency has stopped ac­cept­ing ap­pli­ca­tions for aid for two weeks while it adopts re­forms rec­om­mended by a state task force. The de­part­ment will try to clear a backlog of nearly 600,000 first-time ap­pli­ca­tions and re­view about 1 mil­lion peo­ple who have re­ceived ben­e­fits but whose cases have come un­der scru­tiny. .

Kim­berly Mal­don­ado, a 31-year-old out-of-work mu­sic in­struc­tor, is among the thou­sands of Cal­i­for­ni­ans whose un­em­ploy­ment aid is tied up by bu­reau­cratic snags and the state’s de­ci­sion to sus­pend the pro­cess­ing of new ap­pli­ca­tions.

Mal­don­ado ap­plied for ben­e­fits four weeks ago. She said she calls daily to check on the sta­tus yet reaches only a record­ing that says the de­part­ment is over­whelmed. For her, the wait is grow­ing crit­i­cal.

“It’s lit­er­ally the dif­fer­ence be­tween food on my ta­ble or not,” says Mal­don­ado, who lives in Pla­cen­tia. “I’ve got a 2-year-old, and I’m not re­ally sure how I pay for any­thing in the com­ing weeks.”

Other state un­em­ploy­ment agen­cies have been be­dev­iled by fraud since the pan­demic in­ten­si­fied in March. As tens of mil­lions were laid off, ap­pli­ca­tions for aid over­whelmed the agen­cies, which just weeks ear­lier had been op­er­at­ing with the low­est un­em­ploy­ment rates in 50 years. A now-ex­pired $600-a-week fed­eral un­em­ploy­ment ben­e­fit, on top of reg­u­lar state ben­e­fits, pro­vided an added in­cen­tive to ap­ply for aid.

Wash­ing­ton was the first state to be hit as an in­ter­na­tional fraud ring based in Nige­ria man­aged to steal up to $650 mil­lion in ben­e­fit pay­ments, al­though at least half that money has been re­cov­ered. Texas, Florida and Ok­la­homa have also been af­fected.

In Penn­syl­va­nia, in­ves­ti­ga­tors are also tack­ling fraud. On Wed­nes­day, state of­fi­cials an­nounced that 18 state prison in­mates and two girl­friends of in­mates on the out­side had been charged in what of­fi­cials de­scribed as a scheme to fraud­u­lently ob­tain job­less ben­e­fits for in­el­i­gi­ble pris­on­ers.

Af­ter cross-check­ing un­em­ploy­ment ap­pli­ca­tions with state prison rolls, they found 10,000 peo­ple on both lists — more than one­fifth of the state’s prison pop­u­la­tion. The 20 peo­ple who were charged Wed­nes­day had sought a com­bined $300,000 in money from the Pan­demic Un­em­ploy­ment As­sis­tance pro­gram, state At­tor­ney Gen­eral Josh Shapiro said.

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