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States have lost billions to unemployment fraud

The National Desk's Angela Brown dives in to fraudulent unemplyment claims. (SBG)
The National Desk's Angela Brown dives in to fraudulent unemplyment claims. (SBG)
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WASHINGTON (SBG) - Unemployment fraud is on the rise, with states losing billions of dollars and thousands of identities stolen across the country. The U.S. Department of Labor estimated states paid as much as $36 billion in improper benefits.

In Illinois, they saw over 212,000 fraudulent claims for unemployment benefits in 2020, according to the Illinois Department of Employment Security.

IDES “is experiencing fraud in an order of magnitude we’ve never seen before,” said acting director Kristin Richards. Maryland uncovered a “coordinated criminal enterprise” that resulted in more than 47,5000 fraudulent unemployment insurance claims adding up to more than $501 million. In California, they’ve paid $11.4 billion in fraudulent unemployment claims.

According to California Assemblywoman Lorena Gonzales, most of the fraud is through the pandemic unemployment assistance program.

“We opened up this federal program which isn’t linked to your employer. It's not insurance; it was to provide benefits to unemployed small businesses and independent contractors who simply said I can’t work because of the pandemic,” said Assemblywoman Gonzales. “There is no double check on it, almost all the fraud is through that program.

Assemblywoman Gonzales says she gets calls from victims of identity theft from across the country.

“She was in a different state, and she reached out to me and she said someone in California stole my identity and because they did that I can’t get unemployment,” said Assemblywoman Gonzales.

Victims often find out their identity was stolen when they apply for benefits, receive a notification from the state unemployment office, or get a tax form from the IRS. If you’ve been a victim of identity theft, there are some actions you can take.

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“What you should immediately do is put a freeze on your credit report and contact all of the credit bureaus and put a freeze on your account, contact your local police department and look to the FBI for different resources,” says cybersecurity expert Leeza Garber.

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