Fraudulent jobless payments in pandemic could be over $45 billion

Some $45.6 billion in pandemic unemployment benefits may have been fraudulently paid to criminals between March 2020 and April 2022, the US Department of Labor’s Office of the Inspector General said in a memorandum on Thursday. It’s the latest report to identify widespread schemes to steal money from a variety of federal relief programs.

The updated figure is a big jump from the $16 billion in potentially fraudulent unemployment payments that the office cited in a June 2021 alert, which looked at claims from March through October of 2020. Since then, there were increases in payments tied to Social Security numbers of people who filed in multiple states, who were deceased and who used suspicious email accounts in their claims — all deemed high-risk areas. …

Fraud within the nation’s unemployment system skyrocketed after Congress enacted a historic expansion of the program to help Americans deal with the economic upheaval sparked by the Covid-19 pandemic in March 2020. State unemployment agencies were overwhelmed with record numbers of claims and relaxed some requirements in an effort to get the money out the door quickly to those who had lost their jobs. Within five months, more than 57 million people filed claims for unemployment benefits, the inspector general’s office said.

“Hundreds of billions in pandemic funds attracted fraudsters seeking to exploit the UI program — resulting in historic levels of fraud and other improper payments,” Inspector General Larry Turner said in a statement.