More than $45 billion in unemployment benefits was misappropriated in the United States during the pandemic, when those benefits were expanded in the face of mass layoffs, according to a new growing estimate from the Labor Department’s Oversight Services.
Between March 2020 and April 2022, $45.6 billion in unemployment benefits was collected fraudulently, according to a report released Thursday by the U.S. Department of Labor’s Inspector General.
This is $30 billion more than the previous estimate published in June. So far, more than 1,000 people have been charged with their involvement in these frauds.
Inspector General Larry Turner said in a statement that these numbers “underscore the extent of this problem,” citing “historical levels of fraud and other abusive payments.”
The COVID-19 pandemic hit the US economy in March 2020, and within two months more than 20 million jobs were destroyed.
The federal government then opened the doors to unemployment benefits, increased the amounts and duration of payments, and expanded the range of beneficiaries.
“In five months, more than 57 million people were registered as unemployed,” the SIGIR said.
However, this influx of claims has disrupted fraudsters, as states, responsible for paying unemployment benefits, have struggled to deal with the “dramatic increase in the volume of unemployment insurance claims and to determine that benefits have been paid to the right person and in the right amount”, identified .
Fraudsters notably embezzled this money by applying for benefits in several states, or by usurping the identities of deceased or imprisoned people.
The report stated that the ministry departments “did not take sufficient steps to implement” the recommendations contained in the various warnings.
Officials at the time acknowledged that some of the programs may pose risks, but stressed the need to disburse aid quickly.
Unemployment services have been completely overwhelmed by the unprecedented number of filings due to COVID, highlighting the longstanding lack of investment.
Pictures of men and women waiting for hours in their car to register were a sign of morale. So are the testimonies of those who waited weeks for an answer or payment, and were unable to pay their rent or cover their daily expenses.
