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An inspector general review has found some $2.6 million in potentially fraudulent unemployment insurance claims made in the names of DHS employees, adding that it is likely that some of them resulted from identity theft.
The review focused on the “lost wages assistance” program that operated in the summer of 2020 which paid eligible claimants a supplement of $300 or $400 per week, for up to 6 weeks, in addition to their weekly unemployment benefits.
The state offices that carried out the program overall “have experienced a surge in fraudulent unemployment claims involving cyber scams and identify theft. Many of these claims are filed by organized crime rings using stolen identities accessed or purchased from past data breaches, the majority of which involved larger criminal efforts unrelated to unemployment,” it said.
The IG said the LWA program was “hastily implemented . . . without developing program controls to prevent fraud.” DHS “is also culpable” because it did not ensure that those state agencies were given accurate had accurate information to determine eligibility, which “significantly increased DHS employees’ risk of fraud and exposure to identity theft,” it said.
The IG found that some 1,800 claims that were “linked to DHS employees’ identities”—that is, filed either by employees themselves or by someone else using their identity—were ineligible or potentially ineligible for those benefits. Nearly another 600 involved employees who were eligible due to furloughs imposed in the early period of the pandemic, but a third of those “showed a high or medium risk of fraudulent activity, including identity theft, based on fraud risk indicators.”
It added: “Most victims of UI program identity theft are unaware that claims have been filed or that benefits have been collected using their identities. Many people only find out they are the victim of UI program identity theft when they receive documentation in the mail, such as UI benefit payments or state-issued 1099-G tax forms that are incorrect or reflect benefits not received.”
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