A wave of attempted fraud is hitting state unemployment benefits programs after they struggled to process record-high claims from layoffs during the economic turbulence triggered by the coronavirus pandemic.
States across the country—including California, Louisiana, Illinois, Maryland and others—have collectively received millions of unemployment insurance requests that officials believe to be tied to fraud, with losses likely in the billions of dollars.
More than $500 billion in regular and pandemic-related unemployment aid has been distributed so far, according to Treasury Department data. And more is coming, including a new round of enhanced benefits worth $300 a week included in a pandemic stimulus package passed by Congress.
“The sheer generosity of the federal programs made them targets for criminal enterprises at a time that states lacked the resources, the computers,” said Labor Secretary Eugene Scalia earlier this month in a speech to the American Enterprise Institute. He said he feared “U.S. taxpayers lost billions to unemployment-insurance fraud during the pandemic.”
Maria Therese Ramirez, a laid-off office manager from Union City, Calif., said she was attempting to buy groceries at Trader Joe’s in October when she discovered the Bank of America debit card holding her unemployment benefits had been frozen. A total of $3,180 had been withdrawn from her account in four separate withdrawals, the 35-year-old Ms. Ramirez learned after reviewing bank statements.
– Courtesy Wall Street Journal