WASHINGTON, DC – With new reports of unemployment insurance fraud surfacing daily, Republican Ways and Means leaders requested their House Democrat counterparts to hold a joint hearing to investigate the extent of fraud in CARES Act unemployment programs.

The letter was signed by Ways and Means Republican Leader Kevin Brady (R-TX), Ways and Means Worker and Family Support Subcommittee Republican Leader Jackie Walorski (R-IN), and Ways and Means Oversight Subcommittee Republican Leader Mike Kelly (R-PA).

“A hearing on unemployment fraud is long overdue. Generous unemployment benefits, including the additional $600/week, and now $300/week, are an easy target for criminals using stolen identities. We are concerned that Democrats’ partisan COVID package would extend these unemployment benefits with no additional protections against vulnerabilities, and without having held a single hearing to determine how to prevent further fraud from occurring,” said the Republican leaders.

A copy of the letter can be found here and further background is below.

Key Facts:

• Ways and Means Committee Democrats unanimously rejected a proposal offered by Rep. Devin Nunes to verify the identity of applicants for unemployment benefits and get documentation prior to sending any money out the door.
• The Labor Department’s Inspector General and the Government Accountability Office have both issued repeated warnings about the vulnerability for abuse of CARES Act unemployment insurance programs.[1][2]
• The Inspector General’s initial audit and investigation indicate improper payments could be at least $63 billion, with a significant portion attributable to fraud.[3]
• The Secret Service circulated a memo to its field offices last May saying an international crime ring has been filing unemployment claims in different states using Social Security Numbers belonging to identity theft victims, including first responders, government personnel and school employees.[4]
• Last month, California state workforce officials confirmed that they paid out fraudulent unemployment claims totaling over $11 billion and identified another $20 billion in claims still under investigation.[5]
• And most recently, the Department of Justice issued a warning that fraudsters are creating websites to mimic unemployment benefit websites to capture consumer’s personal information.[6] 

Ways and Means Republicans have been raising concerns about this issue for months. See:

• REPORT: Fraud overwhelms pandemic-related unemployment programs
• The Way Forward on Unemployment: Stop Criminals from Diverting Billions Away from Unemployed American Workers
• Explainer: Extending and Phasing Out COVID Unemployment Support Responsibly

CARES Act Unemployment Fraud – Nearly A Year’s Worth of Headlines with No Response from House Democrats:

March 2021

• U.S. Department of Justice- Justice Department Warns About Fake Unemployment Benefit Websites (03/04/21)
• AP News- California inmate charged with unemployment benefits fraud (03/04/21)
• Los Angeles Times- Criminals stole billions in COVID-19 unemployment benefits. A new relief bill won’t prevent it from happening again (03/02/21)
• AP News- Fraud overwhelms pandemic-related unemployment programs (03/01/21)
• Politico Pro- DeSantis administration calls for rebuild of Florida’s flawed unemployment system (03/01/21)

February 2021

• The Hill- Foreign perpetrators among fraudsters shamming state’s unemployment systems (02/28/21)
• Ripon Advance- Curtis leads GOP effort requesting federal investigation into unemployment fraud (02/26/21)
• WSJ- Covid-19 Fraudsters Keep Targeting Jobless Claims. What Does It Mean for Workers and the Data? (02/25/21)
• Bloomberg Law- Jobless Aid Fraud Warrants Greater Federal Action, Watchdog Says (02/24/21)
• The Hill- States paying billions in fraudulent unemployment claims (02/22/21)
• CNBC- Taxpayers may be victims of unemployment fraud. The IRS wants to help (02/19/21)
• AP News- Police arrest 2 accused of California unemployment fraud (02/19/21)
• NBC News- How billions in pandemic aid was swindled by con artists and crime syndicates (02/13/21)
• AP News- Records: Virginia paid $40M in inmate unemployment scams (02/12/21)
• Politico Pro- House Republicans call for hearing on California’s unemployment fraud (02/11/21)
• NBC News- Billions were stolen from unemployment coffers. Now, it’s creating a tax headache for victims. (02/10/21)
• The Ripon Advance- Wenstrup, Stivers seek tax fraud protections for Americans receiving unemployment benefits (02/10/21)
• NBC News- Billions were stolen from unemployment coffers. Now, it’s creating a tax headache for victims. (02/10/21)
• CNBC- Unemployment fraud may create a tax nightmare (02/09/21)
• The Hill- Reports of unemployment fraud increase as states mail out tax forms (02/05/21)
• Politico Pro- California lawmakers propose fixes for troubled unemployment system (02/04/21)

January 2021

• AP News- Unemployment fraud audit creates fresh questions for Newsom (01/27/21)
• BloombergLaw- California’s Slow Response to Fraud Cost Billions, Auditor Says (01/28/21)
• AP News- Kansas to shut down unemployment system to deal with fraud (01/27/21)
• PoliticoPro- California lawmakers grill Bank of America, EDD on unemployment system woes (01/26/21)
• BloombergLaw- California Unemployment Fraud Woes Complicate Su’s DOL Hopes (01/26/21)
• AP News- California: Criminal rings loot billions in jobless funds (01/25/21)
• Daily Caller- California Says Unemployment Fraud During Pandemic Cost Taxpayers Up To $31 Billion (01/25/21)
• Los Angeles Times- Two murderers in state prison and other inmates scammed state jobless benefits, DA says (01/25/21)
• Los Angeles Times- California officials say unemployment fraud now totals more than $11 billion (01/25/21)
• Politico Pro- California stops payment on 1.4M ‘potentially fraudulent’ unemployment claims (01/07/21)
• Los Angeles Times- Millions in California coronavirus jobless benefits sent to out-of-state prisoners(01/05/21)
• CNBC- Scammers have taken $36 billion in fraudulent unemployment payments from American workers (01/05/21)

December 2020

• USA Today- How scammers siphoned $36B in fraudulent unemployment payments from US(12/30/20)
• Politico- Californian allegedly obtained UI benefits using Feinstein’s identity (12/17/20)
• Los Angeles Times- Man bought Maserati with unemployment money scammed from state EDD, prosecutors say (12/11/20)
• Politico Pro- Bank of America says it blocked ‘billions’ in fraudulent California UI payments (12/07/20)
• Bloomberg Law- BofA Says $2 Billion Fraudulently Claimed From California Funds (12/07/20)

November 2020

• NYTimes- Unemployment Scam Using Inmates’ Names Costs California Hundreds of Millions(11/24/20)
• Politico- California inmates part of $1B unemployment fraud schemes, prosecutors say(11/24/20)
• WSJ- California Paid Millions for Unemployment Claims in Prisoners’ Names, Prosecutors Say (11/24/20)
• Los Angeles Times- Despite reports of unemployment fraud, California keeps sending mail with Social Security info(11/19/20)
• CNBC- Criminals launder coronavirus relief money, exploit victims through popular apps(11/18/20)

October 2020

• Bloomberg Law- Covid-19 Scammers Driving Unemployment Fraud Across Nation(10/19/20)
• NBC News- Rapper charged with coronavirus benefit fraud after boasting in song about benefit fraud(10/18/20)
• AP News- 10 charged with unemployment insurance fraud in Nevada(10/16/20)
• WSJ- Treasury Unit Warns Banks of Unemployment Fraud(10/13/20)
• Politico- ‘Too sweet of a pie’: Cybercriminals steal $8B in Covid relief funds(10/12/20)
• New York Post- 26 New York court employees probed for phony COVID-19 unemployment claims(10/10/20)
• NYTimes- Fraud Schemes Exploit Weak Spots in Unemployment Claims System (10/01/20)

September 2020

• Wichita Eagle- Kansas unemployment system disrupted by 45,000 bogus claims in massive fraud scheme(09/29/20)
• Seattle Times- Lawmakers push state employment officials on fraud security, employer taxes (09/25/20)
• AP News- Fraud, backlogs disrupt US unemployment benefit payments(09/24/20)
• ABC News- 20 inmates, accomplices charged in COVID-19 unemployment fraud(09/23/20)
• Bloomberg Law- States Deploy Artificial Intelligence to Stop Unemployment Fraud(09/22/20)
• Forbes- Massive Allegations Of Fraud Have Forced California To Temporarily Stop Paying New Unemployment Benefit Claims(09/21/20)
• Seattle Times- Software flaw hid signs of $576 million state unemployment fraud, officials say(09/18/20)
• CBS News- Scammers find weak spot in unemployment benefits during pandemic: “It’s a perfect storm”(09/17/20)
• Forbes- Allegations Of Fraud In The Pandemic Unemployment Assistance Program: Why The System Is Flawed(09/17/20)
• NYTimes- A Lifeline to the Jobless Has Problems With Fraud, and With Math(09/11/20)
  • A comparison of state & federal records by the NYT suggests that the 15 million UI claims may overstate the # of UI recipients by 5 million
• San Francisco Chronicle- California builds barriers to stem suspected spike in unemployment fraud(09/11/20)
• AP News- Colorado deals with widespread fraud in unemployment claims(09/10/20)
  • More than 75% of CO claims for PUA were determined to be fraudulent
• Politico- California: Fraud likely driving suspicious spike in unemployment claims(09/10/20)
• Fox Business- The Pandemic Unemployment Assistance program is ripe for abuse, Congress must act as our debt piles up(09/10/20)
• CBS Los Angeles- Scammers Target California Unemployment Benefits From Out Of State(09/10/20)
  • CA – suspected fraud in self-employed UI claims
• Fox13- Dept. of Labor investigates thousands of fraud claims(09/07/20)
  • TN Dept. of Labor has investigated more than 3,300 claims of UI fraud

August 2020

• CBS Pittsburgh- Thousands Of Inmates Statewide Have Filed For Over $100M In Coronavirus Unemployment Benefits (08/25/20)
• Baltimore Sun- Some unemployed workers affected by fraud probe still without benefits a month after Maryland froze accounts (08/12/20)
• Bloomberg Law- Virus Jobless Aid Needs More Oversight, Guidance: Watchdog (08/11/20)
• Politico Pro- DOL agency failing to curb unemployment fraud, OIG finds (08/11/20)
• Seattle Times- Why did it take more than 2 months to stop the largest fraud in Washington state history?(08/10/20)
  • $576 million in unemployment fraud
• Seattle Times- Agency: Nearly 87,000 bogus unemployment claims filed in Washington state (08/03/20)
  • $576 million in unemployment fraud

July 2020

• AP News- Hogan announces $501M unemployment insurance fraud case (07/15/20)
  • $501 million in UI fraud
• Federal Bureau of Investigation- FBI Sees Spike in Fraudulent Unemployment Insurance Claims Filed Using Stolen Identities (07/06/20)
• NYTimes- Fraudulent Jobless Claims Slow Relief to the Truly Desperate (07/02/20)

June 2020

• AZ Central- Unemployment fraud a growing issue in Arizona, slowing payments to those in need(06/30/20)
• Roll Call- After jobless cases soared, states seek to root out the fraud (06/24/20)
  • The inspector general had estimated fraud could run to $26 billion, applying a 10 percent rule of thumb developed over years of auditing state unemployment programs
• The Hill- States must take action to protect against unemployment fraud (06/23/20)
• Seattle Times- Some Washington workers seeking jobless benefits say their bank accounts have been frozen (06/18/20)
  • An estimated $550 million to $650 million
• CNBC- Coronavirus scams have cost Americans $68 million so far—here are the states hit hardest(06/16/20)
  • States hit the hardest: ME, MA, WA, HI, and RI
• Clarion Ledger- Mississippi officials warn of surge in fraudsters attacking state’s unemployment system(06/16/20)
• AP News- Michigan resumes 140K jobless payments after fraud concerns (06/12/20)
  • more than 50,000 reports of UI fraud and identity theft since 3/15
• WaPo- Unemployed workers face new delays and paused payments as states race to stamp out massive nationwide scam (06/12/20)
• Seattle Times- National Guard called in to help process thousands of unemployment benefit claims(06/11/20)
  • About $650 million estimated in UI fraud in Washington state
• WaPo- States scramble to deal with potential spikes in unemployment fraud, prompting Democrats to demand answers (06/08/20)
• AP News- Criminals stealing unemployment benefits as claims surge (06/07/20)
  • An estimated $26 billion in benefits could be wasted
• Seattle Times- Washington’s unemployment fraud may have hit $650 million; state recovers $333 million (06/04/20)
• WSJ- Unemployment Fraud Spreads Across U.S. as Coronavirus Boosts Claims (06/03/20)
• Bloomberg Law- Jobless Aid Stalls in States as Pressure Mounts to Prevent Fraud (06/02/20)
• Politico Pro- DOL watchdogs warn of ‘unprecedented’ unemployment insurance fraud (06/01/20)

[1] U.S. Department of Labor, “DOL-OIG Oversight of the Unemployment Insurance program,” February 3, 2021; “Alert Memorandum: The Employment and Training Administration (ETA) Needs to Ensure State Workforce Agencies (SWA) Implement Effective Unemployment Insurance Program Fraud Controls for High Risk Areas,” February 22, 2021.

[2] “COVID-19: Critical Vaccine Distribution, Supply Chain, Program Integrity, and other Challenges Require Focused Federal Attention,” Government Accountability Office, January 28, 2021. (GAO-21-265)

[3] U.S. Department of Labor, Office of Inspector General: https://www.oig.dol.gov/doloiguioversightwork.htm

[4] “Massive Fraud Against Unemployment Insurance Programs, U.S. Secret Service, May 5, 2020, Alert: https://www.documentcloud.org/documents/6891584-GIOC-Alert-20-027-I-State-Unemployment-Fraud-002.html

[5] “McCarthy, Steel, and CA Republicans Condemn Newsome Administration for Mismanagement of $11.4 B in Taxpayer Funds,” February 5, 2021.

[6] U.S. Department of Justice, “Justice Department Warns About Fake Unemployment Benefit Websites,” March 4, 2021.