Credit: Kalim A. Bhatti
A massive sum of unemployment benefits targeted by fraudsters was saved by Pennsylvania officials.
On Monday morning, Pennsylvania Treasurer Stacy Garrity and Acting Secretary of Labor and Industry Jennifer Berrier announced nearly $800 million in benefits were “recaptured.”
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The bulk of the fraud was targeted at the federal Pandemic Unemployment Assistance (PUA) program started last year.
The two state agencies worked together to halt nearly $740 million in improper payments issued and $55 million in fraudulent payments were stopped from being issued between April 2020 and the end of March, officials said.
As part of their joint anti-fraud efforts, the two agencies:
- Issued stop payments on 28,000 fraudulent paper check payments returned by honest citizens and an additional 57,000 stale-dated check payments.
- Canceled more than 27,000 debit cards returned to Treasury by honest Pennsylvanians and an additional 53,000 stale-dated cards.
- Reversed approximately 17,000 fraudulent ACH benefit payments.
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Authorities were able to save some of the funds through information provided by thousands of “honest Pennsylvanians who returned payments they had not requested.” officials said.
The fraud in the wake of the COVID-19 pandemic and increased unemployment benefits came to light last spring. Treasury and labor and industry officials have worked on the cases and coordinated with law enforcement agencies.
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“All across the nation, PUA was targeted by criminals intent on stealing benefits. The staffs at Treasury and the Department of Labor & Industry did a remarkable job of recovering fraudulently disbursed funds,” Garrity said. “Within weeks of the first PUA payments being sent out, we determined that fraudsters from around the globe had descended upon the program and took steps to recover fraudulently disbursed funds.”
Berrier said the partnership with the treasury, law enforcement, and officials in other states have helped Pennsylvania fight fraud.
From state officials:
While unemployment payments typically are issued through the recipient’s choice of direct deposit, paper check, or debit card, fraudsters began intercepting paper checks and redirecting direct deposits in early PUA fraud schemes. By early July, all PUA payments were transitioned to debit cards, permitting funds to be held or restricted in response to financial anomalies indicating a high risk of fraud.
Many cases of fraud within the PUA program occurred when fraudsters used personal information stolen through data breaches that occurred outside of government to fraudulently file for benefits. One of the earliest signs that criminals were trying to steal benefits came when honest Pennsylvanians started returning benefits they had never applied for.
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Starting last October, the state started using the ID.me certification tool to confirm the identity of people applying for pandemic-related benefits. Of the 978,000 PUA claimants since that system was put into place, only 155,000 individuals have successfully verified their identity with ID.me.
“Based on these numbers, it is presumed that nearly 84 percent of those claims were fraudulent,” Berrier said.
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The inspector general for the U.S. Department of Labor estimates that more than $63 billion in unemployment funds were paid due to fraud or mistakes across the country during the pandemic. In addition to state-level investigative agencies, federal authorities are working to track down fraudsters.
Anyone who received Pennsylvania unemployment benefits for which they did not apply is asked to report this to state officials. Instructions for returning mistakenly received debit cards, checks or electronic payments can be found at patreasury.gov/uc-swif-ssp/.
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Residents who received unemployment compensation benefits that they did not file for have been asked to check whether their identity has been compromised and take advantage of free credit reports being offered by TransUnion, Equifax, and Experian through April 2022 at AnnualCreditReport.com.
State officials warning people who receive suspicious emails or text messages regarding unemployment compensation benefits, not to click on any links. In addition, the U.S. Department of Justice asks that you file a report with the National Center for Disaster Fraud online at www.justice.gov/disaster-fraud or by calling 866-720-5721.
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