October 2, 2023
U.S. watchdog estimates $45.6 billion in pandemic unemployment fraud
WASHINGTON - A federal watchdog on Thursday found that fraudsters may have stolen $45.6 billion from the nation’s unemployment insurance program during the pandemic, using the Social Security numbers of dead people and other tactics to deceive and bilk the U.S. government.

The new estimate is a dramatic increase from the roughly $16 billion in potential fraud identified a year ago, and it illustrates the immense task still ahead of Washington as it seeks to pinpoint the losses, recover the funds and hold criminals accountable for stealing from a vast array of federal relief programs.

The report, issued by the inspector general for the Labor Department, paints a grim portrait of the country’s jobless aid program beginning under the Trump administration in 2020. The weekly benefits helped more than 57 million families just in the first five months of the crisis — yet the program quickly emerged as a tempting target for criminals.

To siphon away funds, scammers allegedly filed billions of dollars in unemployment claims in multiple states simultaneously and relied on suspicious, hard-to-trace emails. In some cases, they used more than 205,000 Social Security numbers that belonged to dead people. Other suspected criminals obtained benefits using the identities of prisoners who were ineligible for aid.

But officials at the watchdog office warned their accounting still may be incomplete: They said they were not able to access more updated federal prisoner data from the Justice Department, and acknowledged that they only focused their report on “high risk” areas for fraud. The two factors raised the prospect that they could uncover billions of dollars in additional theft in the months to come.

The government also announced Thursday it had reached the “milestone” of charging 1,000 individuals with crimes involving jobless benefits during the pandemic. Kevin Chambers, the director for coronavirus-related enforcement for the Justice Department, described the situation in a statement as “unprecedented fraud.” The inspector general’s office, meanwhile, said it had opened roughly 190,000 investigative matters related to unemployment insurance fraud since the start of the pandemic.

Earlier this week, federal prosecutors charged 47 defendants in an entirely different scheme targeting a program to provide free meals for needy children. The organization, Feeding Our Future, allegedly stole more than $250 million from the meal program in what the Justice Department described as the largest single fraud case targeting coronavirus aid to date.

Federal investigators similarly have raised alarms and pursued charges involving roughly $1 trillion in loans and grants meant to help small businesses. But theft isn’t the only issue: In some cases, the government’s generous aid proved ineffective or helped finance pet projects that had nothing to do with addressing the coronavirus, The Post has found. (Source: The Washington Post)
Story Date: September 23, 2022
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