COVID Unemployment Programs Overwhelmed by 'Epidemic of Fraud'

AP Photo/J. Scott Applewhite
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Government programs designed to help the millions of Americans put out of work by the pandemic state-imposed lockdowns have turned into a gold mine for scammers

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The Associated Press is reporting that criminals, both foreign and domestic, are flooding state unemployment agencies with bogus claims, using personal information stolen from American citizens.

The U.S. Justice Department is investigating unemployment fraud by “transnational criminal organizations, sophisticated domestic actors, and individuals across the United States,” said Joshua Stueve, a spokesman for the department’s criminal division.

The Labor Department inspector general’s office estimates that more than $63 billion has been paid out improperly through fraud or errors – roughly 10% of the total amount paid under coronavirus pandemic-related unemployment programs since March.

As Rep. Kevin Brady (TX), the ranking Republican on the House Ways and Means Committee, notes, that $63 billion estimate “is larger than the entire budget of the Department of Homeland Security.”

Brady goes on to describe what we’re facing as an “epidemic of fraud.”

California, of course, has been the biggest target. It’s estimated the state has shelled out around $11 billion in fraudulent claims, with another $19 billion going into accounts that are suspected of being phony.

But Colorado is giving the Golden State a run for its money, paying out nearly as much in bogus claims, $6.5 billion, as it has in legit ones.

Other estimates[…] range from several hundred thousand dollars in smaller states such as Alaska and Wyoming to hundreds of millions in more populous states such as Massachusetts and Ohio.

And, of course, since all these scams are based on identity theft, struggling Americans who’ve applied for government aid to ameliorate a situation the government itself caused by imposing lockdowns are getting even more screwed over.

An Ohio woman named Cynthia Sbertoli who lost her job in March is being subjected to a nightmare that reads like something out of Kafka.  After discovering that someone had unsuccessfully tried to file a false claim in her name, she quite naturally reported it to the state.

Result: Her $228 in monthly benefits were suspended in January, and the situation has yet to be resolved.

As Sbertoli notes:

“It’s just not a good way to take care of people.”

Given that she and her husband were using that money to help pay for their son’s vision and auditory therapy and that it’s the government who put her out of work in the first place, Mrs. Sbertoli is showing admirable restraint, here.

Like so much we’ve seen since China’s Communist Party rulers first started their one-two-punch campaign to make Western nations panic about COVID-19 and then self-destruct by implementing the toxic snake oil of lockdowns in response, the situation is both sickening and criminal.