Fraud plagues pandemic aid system
Criminals are attacking a federally funded coronavirus pandemic program meant to provide unemployment benefits in Ohio and elsewhere to those who don’t typically qualify.
As many as a third of the 810,313 claims filed in Ohio under the Pandemic Unemployment Assistance program could be fraudulent, the state said Monday, with potentially millions of dollars in benefits being paid to criminals.
Ohio has put a temporary hold on 270,000 claims for unemployment benefits.
More than 95% of those claims — representing an estimated $200 million each week — have been flagged for possible fraud.
“Unfortunately, there are criminals hoping to take advantage of the COVID-19 emergency at the expense of honest Ohioans who have earned their benefits,” said Kimberly Hall, director of the Ohio Department of Job and Family Services. “We regret that legitimate claimants have been caught up in this fraud scheme, but we are charged with maintaining program integrity so that we can preserve benefits for those who need them.”
The state has received claims under the program from dead people and those using bogus internet protocol addresses, bank routing numbers and email addresses.
In three cases, the state has received more than 100 claims tied to the same email address. Claims have been filed by 1,700 dead people.
Other states, including Washington, Maryland, Arizona and Michigan, have had similar issues with claims under the program. Media outlets have reported that international criminal rings are behind the fraud.
The bogus claims are the latest in a string of frustrations for Job and Family Services officials handling the surge in unemployment claims caused by the coronavirus outbreak.
The state’s system has been overwhelmed, resulting in long delays for some people claiming benefits. Others have complained about long wait times on the phone or the inability to reach an agent.
In response, the state has ramped up staffing.
The federal pandemic program provides benefits to contractors, the selfemployed, gig workers and others who don’t normally qualify for unemployment benefits.
The state had to quickly set up a separate application program to handle those claims, which began in May.
Job and Family Services is requiring new claims with a suspicious routing number or other irregularities to undergo a second, more comprehensive round of identity verification.
Legitimate claimants, less than 1% of which have been identified so far among the flagged claims, will need to prove their identity once they receive instructions on how to verify the validity of their claims.
The state said about 2,000 of the Pandemic Unemployment Assistance claims have been released for payment.
Advocates for unemployed and low-income Ohioans said the fraud investigation and potential loss of millions of dollars of badly needed assistance is disheartening. It also comes at a critical time, as the coronavirus surges and policymakers in Washington clash over the continuance of pandemic unemployment money.
Lisa Hamler-fugitt, executive director of the Ohio Association of Foodbanks, said she worries that blame will center on the program’s recipients instead of “the organized crime” responsible for problems.
“What was the debate about? That people were living large on their pandemic unemployment benefits. Well, how many actually got those benefits?” she said. “There clearly were a lot of folks who got caught up in this who have legitimate claims. Fraudsters see an opportunity around every corner, I guess.”
The fraud also plagues a system that has been overwhelmed from the start, said Joel Potts, executive director of the Ohio Job and Family Services Directors’ Association. “They’re playing catch up,” he said. Job and Family Services has reassigned 185 regular unemployment adjudicators to help process legitimate claims. The agency also has brought on an additional 60 staff members to assist, with 20 more starting next week. mawilliams@dispatch.com @Bizmarkwilliams rprice@dispatch.com @Ritaprice