Washington recovers $300 million of fraudulent jobless claims
May 28, 2020 Updated Thu., May 28, 2020 at 10:43 p.m.
Washington has recovered $300 million paid to scammers who duped the state’s unemployment system amid an unprecedented number of claims by people left jobless by the coronavirus pandemic.
Investigations continue as the Employment Security Department credited federal agents, banks and other financial institutions from around the county for curbing the fraud and returned money.
The state expected to receive an initial $50 million Thursday in recovered funds, ESD Commissioner Suzi LeVine said.
A large portion of the money was returned from banks, which reached out after noticing suspicious activity. And some money was returned from Green Dot, a prepaid debit card company, which was able to retrieve those funds before they were applied to their cards, she said.
The department cleared about 55,000 people awaiting benefits Wednesday, and the state is continuing to issue legitimate payments as quickly as possible while continuing to look for fraudulent activity, LeVine said.
The scale of the fraud, blamed on a Nigerian-based crime ring, was first reported last week. The state has yet to disclose how much money was potentially paid to fraudulent claims.
The department received far fewer claims for unemployment last week, which may signify the state’s anti-fraud efforts.
The declines began May 14, when the department placed a pause on payments to better verify the claimants’ identities, LeVine said.
“We are aware, however, that the criminals have not gone away because we continue to see significant highly suspicious traffic,” she said.
Nearly 1.5 million claims for benefits – with some of that number reflecting people who filed multiple claims – were filed for the week of May 17-23, according to the Associated Press. More than $494.5 million was paid last week to 424,995 individual claims.
The state has so far paid about $4.7 billion in benefits to more than 807,000 people, including federal money that is providing the unemployed with an additional $600 a week on top of the state’s weekly maximum benefit of up to $790 per week, the AP reported.
Of the more than 323,000 still awaiting payment, LeVine said most are cases where someone has filed an initial application but not a weekly claim, or those who haven’t applied since the federal program made them eligible.
About 44,000 people are in adjudication, LeVine said, as application issues undergo investigation.
“We will pay people all the benefits that they are owed,” she said. “At the same time, we need to take these additional precautions to ensure that we’re not sending taxpayer dollars out to the criminals.”
More than 40 million people across the country have filed for unemployment help as the jobless numbers continue to climb.
In Washington, the unemployment rate reached a record 15.4% last month.
Despite the department’s efforts to flag fraudulent accounts and help people regain access to them, many people are concerned with the extensive process to report the fraud and be cleared, including Spokane resident Nancy Chappell, who works as an accountant in Spokane Valley.
On May 7, Chappell’s employer received a notice from ESD stating Chappell had applied for unemployment.
Chappell said she was told to create an account to see if her information had been stolen.
The next day, Chappell discovered the claim was fraudulent because she couldn’t get access to it. Chappell regained her account on May 9 and was told she didn’t have to worry about anything else.
In the following days, Chappell said she received an email telling her she had an action pending on her account. When she checked her account, she saw that the payments had been made without waiting for her employer’s response.
She said she then received a letter informing her they denied the unemployment benefits and needed to pay amount paid out which totaled $9,300 and asked her to provide additional identity verification. She called ESD and followed the steps to report the fraudulent activity again last Friday, but said she continues to receive notifications to file her weekly unemployment claim.
“It’s ridiculous to me, it’s like they have no idea what’s going on,” she said. “Every time I think this is over something else happens – it’s very frustrating.”
She said she didn’t understand why she is still receiving claims if her account was marked as fraudulent and it takes hours to reach someone from ESD who could provide her with the answers she needs.
“I know they have limited resources, but maybe if their identity was stolen they’d have more urgency, it seems like they don’t really care,” she said.
Chappell said it’s frustrating to see the department’s hesitation to take full responsibility for what’s going on. She said it just seems like they’re trying to point the finger and people still don’t know how scammers acquired their personal information.
Chappell received a call on Thursday from people claiming to be from the U.S. Marshall’s office, which seemed legitimate at first. Then they told her that her social security number was linked to a drug bust in El Paso, Texas, and asked her for personal information.
“I just want it to go away, I feel like it’s ongoing,” Chappell said. “My information is out there and it’s unnerving.”
The department continues to expand the investigative team looking into fraudulent activity and will be hiring hundreds more individuals to assist with the process helping fraud victims, LeVine said.
Washington was one of the first states to offer residents financial assistance through the CARES Act provisions. That left the state vulnerable to attacks from sophisticated international criminals, LeVine said.
“What we faced was far in excess of anything for which anybody could plan,” she said. “Immediately when we identified the magnitude of this attack, we put countermeasures in place and saw a sudden drop in the fraud being perpetrated.”
The department is working to flag the accounts of people who’ve had their personal information stolen and officials are making sure those claims do not go out, LeVine said.
LeVine has stated previously that people who’ve been victims of fraudulent claims will not have to repay any of the stolen money.
It’s necessary for people to report fraudulent activity and follow up with the department to regain access to their account or move on with the claim process if they are in need of unemployment assistance, she added.
Claimants and victims of fraud should keep an eye out for emails and notifications sent by the department asking them to provide additional information to verify their identity, LeVine said.
People should only submit sensitive information through the Employment Security secure portal website because there have been reports of fraudulent schemes that have been sending people to other websites in an attempt to retrieve their personal information.
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