Did you miss your unemployment payment? California has handed out at least $20 billion in false unemployment benefits to criminals, state authorities said Monday, confirming a figure that is lower than previously estimated but still amounts for more than 11% of all benefits granted since the outbreak began.
Nearly all of the fraud was blamed on a hurriedly authorized extension of unemployment benefits by Congress, which allowed self-employed persons to receive weekly checks from the government with insufficient controls to prevent people from receiving benefits who were not qualified.
According to a June investigation from the US Department of Labor’s inspector general’s office, the pandemic ushered in rampant fraud at unemployment agencies around the US, with at least $87 billion in fraudulent payments issued by states. Scammers allegedly grabbed roughly 30% of all jobless benefit payments in Arizona alone, according to state authorities.
The deception was so pervasive in California that state authorities approved at least $810 million in benefits in the names of inmates, including dozens of notorious criminals on death row. State authorities even sent $21,000 in benefits to a Roseville home in the name and Social Security number of U.S. Senator Dianne Feinstein, which was part of a total of $2 million in bogus payments made to the same location.
On Monday, however, Gov. Gavin Newsom’s administration attempted to reassure state legislators that California’s fraud pipeline had been shut down. According to Rita Saenz, director of the Employment Development Department, the state has adopted new identity verification software that, combined with other preventive measures, has prevented an estimated $120 billion in fraud efforts.
State authorities assessed the theft to be worth up to $31 billion in January. However, state authorities amended that figure down to $20 billion on Monday. Former U.S. Attorney McGregor Scott has been retained by the Newsom administration to assist in the prosecution of fraudsters, with the department stating on Monday that investigations are still underway.
However, the department is nonetheless beset by other issues. When individuals claim unemployment benefits, the information they provide to the state may vary from the information provided by their former employer. When this occurs, state authorities must interview these individuals to settle the concerns.
However, these interviews might take up to six months to complete. This delay, according to Saenz, is “unacceptable.” She did say, however, that the state has a new policy that pays individuals their benefits while they wait if they clear the state’s fraud filters. About half of the persons waiting for interviews, according to Saenz, are paid.
Saenz assured legislators that the agency had met all of the auditor’s timelines for making adjustments. She said that by the end of November, the agency intends to complete the recruiting process for its newly constituted fraud investigation team.
Other adjustments, on the other hand, will take longer. The agency is developing a new method that would transfer unemployment benefits directly into people’s bank accounts rather than mailing checks or debit cards, which are more vulnerable to fraud. However, according to Saenz, this will take a few years to execute.
Some MPs were irritated by the delay, saying they were concerned that people were losing trust in their government.