400K unemployment claims now flagged in Michigan fraud investigation

The Michigan Unemployment Insurance Agency has been able to validate about 140,000 legitimate claims for unemployment benefits in the past week. (Shutterstock)

June 19: Michigan may have lost millions to over 100,000 fake unemployment claims

Michigan’s fraud investigation into unemployment benefits has restored payments to 41 percent of the people initially affected — and it’s turned up at least 200,000 new potential cases.

That leaves at least 400,000 accounts going unpaid while the state’s Unemployment Insurance Agency continues to seek accounts that may have been set up with stolen identities during the coronavirus pandemic, state officials said Friday.

Many of the frozen accounts sought jobless benefits under the federal Pandemic Unemployment Assistance, which allows part-time, contract and “gig” workers to seek payments — including a $600 weekly benefit — with little or no documentation.

 

“We saw a huge spike in PUA claims in recent weeks, many of which we believe are potentially fraudulent,” said Jason Moon, spokesperson for the UIA.

The UIA has received more than 40,000 complaints from people reporting unemployment fraud had been made in their names since May 1, an increase of 10,000 from the previous six weeks combined. 

According to the Michigan State Police, a state task force involving so far has: 

  • Initiated hundreds of active investigations of suspected fraud from individuals based from Michigan to around the world. 
  • Issued hundreds of subpoenas to financial institutions. 
  • Communicated daily with financial institutions to monitor for potential criminal activity and prevent payments to criminals.

Jeff Donofrio, director of the Department of Labor and Economic Opportunity, which oversees UIA, said on June 5  the state had issued  “stop payment” notices on 340,000 active accounts, freezing payments on all of them. About 2.2 million Michigan residents have filed for jobless benefits since March 15.

The move to stop payments and launch the investigation came after national concerns grew over unemployment fraud, with several other states also starting their own investigations. The U.S. Secret Service issued a national alert in May warning about unemployment fraud by an international crime ring, and the U.S. Dept. of Labor has estimated more than $26 billion may be paid in fraudulent unemployment benefits.

Michigan residents who’d had their accounts flagged for potential fraud expressed frustration with a system that, since mid-March and the statewide stay-at-home order, had been overwhelmed with applicants and plagued by slow responses. 

They worried that the stop-payment orders would result in payment delays as each was asked to provide documents to verify their identities. The state, meanwhile, said that it was deploying 600 UIA workers to start the verification process, with another 200 to be added.

“Over the last week, the UIA was able to validate more than 140,000 legitimate accounts, with benefits resuming within days,” according to a news release issued by the department Friday.

Yet many of Michigan’s new claims filed have been flagged for suspicions of fraud, the state said Friday.  No payments have been sent to more than 200,000 new accounts, which now must also provide the additional identification verification.

Law enforcement is working with UIA as it uses data analytics and direct outreach to “identify legitimate claimants and release benefits as quickly as possible,” according to the release.

Moon said he could not release additional details on the nature of the potential fraud or results from the investigation.

However, Moon said, the next steps could involve prosecution of fraudulent accounts.

“We are … bringing in a third-party forensic accounting firm to assist in identifying fraudulent activity that can be quickly turned over to law enforcement for prosecution,” he said.

The state asks anyone who suspects identity fraud with an unemployment claim to contact the UIA. More tips are available online.

“The rise in identity theft reports coupled with suspected fraud in new unemployment claims shows that criminals are still attempting to illegally obtain the benefits. It’s extremely upsetting that the actions of these fraudsters have delayed payments meant for our working families,” said UIA Director Steve Gray.

 “While we continue to work with our state and federal partners to stop this unlawful activity, our focus remains on doing everything we can to quickly validate authentic claims and get our workers the emergency financial assistance they need.”

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Comments

Mohamad Abdulla
Sat, 06/13/2020 - 8:41am

Please I just need my unemployment payments turned on I sent in all my information and it's still inactive please help

Kim
Sat, 06/13/2020 - 11:58am

The withholding of funds due to Michiganders is not the fault of fraudsters! It is the fault of Michigan unemployment insurance agency. Stop believing the lies. Many of us have lost everything because of the Incompetent actions of this agency. These funds are supposed to help us so we don't lose everything. LAWSUIT!! I've paid my dues and now Michigan will answer. They kill our elderly by exposing and purposely putting contagious people into the nursing facilities. They have taken our freedoms. Time to stand up and let them know it's unacceptable!

Evel Knivel
Sun, 06/14/2020 - 11:54am

I agree with you 100%

Kay
Sat, 06/20/2020 - 9:02am

I also agree pure bull I am now homeless wait for my information to be cleared this isn't about fraud they just don't want to pay. Know it could be worst good luck

middle of the mit
Sat, 06/13/2020 - 8:46pm

I really can't figure out conservatives. They rail against voter fraud without any news outlet really being able to show more than a handful of fraud over a decade or two, but when it comes to unemployment fraud? Who cares they say! Give me my check!

While I feel for them and those who haven't gotten their checks yet, this is what happens when you drown Government in a bathtub. It's not there to help you when you need it the most and the private sector isn't going to do anything for you.

The biggest problem is that there aren't enough employees to help process claims and look for fraud at the same time, especially at the unprecedented levels we are seeing now. Where are the State bills that are bi-partisan seeking funds for hiring new employees? They aren't there and they aren't going to be.

I hope we are understanding something in these times. We get the Government and infrastructure that we pay for. And if you aren't willing to pay for it, you get what you pay for.

Nutty
Sun, 06/14/2020 - 11:35am

I totally agree with you. The more we pay to the govenerment it seems the more of this we get. I say, the more corrupt and worse the services become, because it becomes even a bigger place for many people to sit and collect money for minimal work and always will be without merit base production which usually ends up making a bunch of self-loathing people and that frustration turns into anger and, spite and hate towards others. Their are a few hard working people out there and in government but they are becoming extinct, discourage by leadership and the motivation of those around them to do a good job. I am one stiffed for 6 weeks worth of income from work with a protest of now over 6 weeks sitting in purgatory, but I also not waiting for the government god to have mercy on me having been a self motivated business owner of 23 years. Not receiving 1 cent from pua from way back in March when my work was deemed non-essential by the govenor but not my customers. I could say more but the comment I am replying to speaks for itself
But I can't imagine some people who really need the money for being a good citizen and obeying orders and taking a loss to do it, For thousands of those like me they are not reporting that were thrown in purgatory jail, I believe now to purposely handicap small business owners any way they can lacks attention.
The lack of real consideration over the plight of others as I read here is why I chose to reply, I also think it is why socialism has good ground here to start planting itself in as this is where thinking has gone to as we see the government trying managing ever aspect of life., but it is not capable and we are heading on a collision course with destruction.

middle of the mit
Sun, 06/14/2020 - 6:34pm

How can you say you agree with me and then complain about government employees that "don't want to work", when it is really there aren't enough employees to do the job that needs to be done?

This is the same reason that the dams didn't have proper regulation, and the same attitude that allowed them to wither until they failed.

If "socialism" as you define it is gaining ground, the only people to blame for it are the capitalists. You are saying that Government trying to keep you safe from a disease is putting you in "purgatory" because you can't claim an unemployment check because there is massive fraud, but you want to stop democracy because you think voting by mail is fraudulent. The reason that capitalists are responsible for socialism gaining ground is because conservatives have given the law and the monetary system to the wealthy. Until Trump got into office conservatives were all for Free Trade Everywhere. They and the private sector took their jobs over seas. They got congress to allow all kinds of Visas so they could also import cheap labor here. They have devalued the worth of Labor. When investors mean more than the populace.....

They have no one to blame but themselves.

Lennie
Mon, 06/15/2020 - 9:41am

Excuse me but to blame conservatives for the decline of labor? You simply cannot be more wrong. Just look at the phony "Obama saved the auto industry" stuff. Truly one of the biggest political lies ever. The people from GM and Chrysler that went to DC to beg for credit ended up getting maligned by the morons in office and the idiots in the press. Take a guess who took the greatest advantage of the 800 billion TARP fund? Democratic allies. Especially those in the banking industry. Yet the guys from GM and Chrysler ended up getting fired to put in more lackeys who had no clue about what they were doing and we ended up giving Chrysler away to satisfy the goofs while the public was angry over airplanes they used. All while the bankers who destroyed credit to begin with leveraged the free cash to prop themselves up. And the UAW and their members were bought off while salaried folk got the short end of the stick.

middle of the mit
Tue, 06/16/2020 - 7:22pm

Excuse me, but I don't think your gas lighting of history is a road you want to travel down. See, this is the time I changed from a conservative into an anti-conservative. You can call me what you want, but that is what I am. Would you like me to refresh your memory? Because those years are burned into my inner being.

TARP- Toxic Asset Relief Program. Put into place to shore up all the NINJA homeloans that losers and users used to pull a fast one on bankers. How did these losers and users come up with a mortgage plan that they didn't invent ,force the banks to abide by it and that Rick Santelli started his rant with?

https://www.youtube.com/watch?v=wcvSjKCU_Zo

Are you sure you want to go down this road?

Did you hear the moral hazard argument? That is why we bailed out the banks with NO clawbacks for executive compensation or bonuses. Those people work under CONTRACT LAW! And if America is going to shirk CONTRACT LAW, then all law is nothing.

But when it came to bailing out GM, we needed to claw back union pay and have a two tier wage system, because hourly union workers bankrupted the corporation and have no contract......and if they do......so what? Break it.

You are also forgetting free trade in your reply https://www.reaganfoundation.org/reagan-institute/centers/articles/is-th...

Not to mention that you care more about corporations and their well being than you do workers.

Yes!

I do blame conservatives. Give me some reason not to!

WE didn't give away Chrysler. The owners of Chrysler sold to BMW. That isn't a giveaway, it is a legitimate sale of a corporation. Private companies do it every day.

What do you think is happening right this moment? Who is the only one that is literally in awe of what the market is doing? And how is it during a 3 month shut down, the Markets are still where they are. And who is doing that?

The people are always going to get the short end of the stick because this is a society run by and for Capitalists. And there are lot of people who think they are capitalists............but they are not.

They are workers, entrepreneurs, and business people. They make their money work for them while running a business, but they still need that business. Capitalists purchase, sell and bankrupt businesses because it is their hobby, not their income.

Jon W
Tue, 06/23/2020 - 3:00pm

This is a multifaceted discussion that you are staring out with identity politics on. The more we all push for division on some invisible line in the sand, the worse off everything gets.

As far as conservatives getting mad about the UIA and their broken fraud system. Its an apples and oranges comparison to voter fraud, because in order to get unemployment, you are required to submit several pieces of information that go above and beyond most proposed voter ID laws. You don't need a social security card in person, or a birth certificate in order to vote. In Michigan, you hand over your drivers license, or they ask a few questions to confirm your identity, then you get to vote. UIA requires multiple forms of verification, your drivers license number, social security number, address, past employers (which is verified) and potentially more. It goes way beyond the proposal to just have a picture ID for voting (Even just a school ID in Michigan is valid).

As far as there not being voter fraud, there is little to no reported fraud. Sure you can say i'm a conspiracy theorist if you think it diminishes my argument, but fact of the matter is, it's no secret that the government doesn't have the best interests of the people in mind. When you have a district like Wayne county or Ottawa (both on opposite sides of the political spectrum), where the majority party holds control by sheer population, are you really going to notice an additional 8,000 votes on top of the 520K votes cast just for Hillary in 2016? On the flip side, are you going to even notice 8,000 votes on top of the 225K for Trump in 2016? Unlike how the electoral votes are counted nationally, Michigan is a popular winner takes all. Trump won Michigan by ~10,000 votes, it's not a lot of fraud before you change the state. All you would have needed was to switch 5352 votes from republican to democrat (or vise versa had Hillary been in the lead) for the entire state to flip. How many dead people voted? How many people who abstained from voting, voted? I highly doubt they are really diving deep in Wayne county or Isabella for that matter. It's no surprise that California or New York with no voter ID run democrat all the time. They just have so many people in the city to overrule everyone else even withot fraud. But places that the gap is less than ~10,000 votes like Michigan, even though removing voter ID might not have raised the amount of fraud by half a percentage point, that half a percentage point would have flipped Michigan to Hillary.

Besides, all that is largely irrelevant anyway. People are mad at the state because they required essentially 'voter ID' to sign up for unemployment, then went ahead and told 350,000+ people that they couldn't vote anyway.

Could you imagine the outrage if in Michigan (since we are required to bring picture ID to the polling locations or go through a whole process to verify your identity) 350,000 people brought their drivers license and social security cards to vote then showed them to the pollsters only to be told they cannot vote? It would be statewide and national outrage. That is why people are mad, because the state has all the information they need to determine if its fraudulent or not, and they are still messing with people on it.

Anonymous
Sun, 06/14/2020 - 6:55am

It looks like Snyder's fraudulent unemployment system "MIDAS" is still alive and still screwing applicants out of their benefits. Since 2013, this system has fraudulently funneled millions of dollars from the unemployment system into the state's general fund.

Melissa
Fri, 07/10/2020 - 1:21am

Yes! It is! The MIDAS system was literally designed to deny and flag accounts. If I’m not mistaken, Michigan is the only one that has that system. We pay into it, our employers pay into it but damn if we can get it when we need it unless we jump through huge hoop after hoop! It’s so disgusting the mess it is! I’m on week 7 of waiting for my account to be cleared.

Paul Jordan
Sun, 06/14/2020 - 11:38am

You may recall that in the Snyder Administration the Unemployment Insurance Agency was caught automatically denying perfectly legitimate unemployment claims. A problematic effect of maladministration is the loss of credibility.

No one should just take this agency's word for it at, given its history. They need to RAPIDLY investigate those 340,000 applicants to justify their withholding of benefits.

Amy Marshall
Sun, 06/14/2020 - 11:38am

When we going get our money I'm not fraud I was work I was layoff Because she the Government I work for Dearborn public schools

Evel Knievel
Sun, 06/14/2020 - 11:53am

Steve Gray & Jeff Donofrio are liars, fraudsters and should be fired IMMEDIATELY. Until they are fired, they should only get their paychecks after going through the same unemployment system we are stuck with.

Cathy
Sun, 06/14/2020 - 3:20pm

In perhaps the most widespread scam, criminals are filing fake unemployment claims on behalf of real people who haven't lost their jobs, hitting one state after another.
A Nigerian crime ring called "Scattered Canary" may be responsible for a lot of this fraud, which is made more attractive by the extra $600 a week in unemployment benefits that Congress enacted.
I truly feel for those trying and unable to get their benefits. I also expect a huge unwarranted slew of unfair criticism directed at Whitmer, the same ones who'll howl more should have been done to protect the state against theft while simultaneously releasing the monies. Unfortunately, we can't have it both ways.

Geoffrey Owen
Mon, 06/15/2020 - 9:16am

It seems the real problem isn't in the fraud checks. The state asks for evidence identifying who you are. Once you provide it and it gets verified you are good. The problem is the time to verify. This should still go very quickly with 600 people assigned to it. At a rate of 10 verification per hour, two weeks tops. The real problem is that once they are checked and verified the payment stop isn't being lifted, the phone lines overwhelmed and the money doesn't get issued.

Kim
Mon, 06/15/2020 - 12:40pm

No, once you verify your ID, they don't just send your check! 5 weeks as go I verified mine. There are no alerts on my account now. There is still the stop payment indicator. I have til Friday, then I lose everything. Even my cat of 14 years because she can't go to the shelter with me. You obviously have no clue.

Michigan fam
Mon, 06/15/2020 - 10:54am

How is this true? Message boards are lighting up this AM with complaints that UIA has started the verification process over & is re-requesting the 2 forms of ID. My family was one to receive the re- "verify your identity" alert. We already certified our identity online June 5, the day we got the letter from UIA, days before the 6/9 deadline. We've waited patiently for 4 weeks for some form of acknowledgment from UIA, that the forms of ID were received, that our calls & online messages had been received, that our stop payment indicators were lifted. Something? Anything? But no, nothing! Now we're being asked to do it all over again. I don't see how 140K claims were processed on Friday when so many are waking up Monday to this frustrating, redundant alert in their Miwam portal.

Tim W
Tue, 06/16/2020 - 10:03am

Six weeks now and still haven't received the ID letter. Had received some checks before they stopped my direct deposit. Have banked with one bank for over 26 years. Come clean people and tell us the real reason you want Michiganders to lose their credit, get late charges added to accounts etc. This is exactly how a bad run business goes bankrupt. Nice job Gretchen. We can now see where your priorities lie. Surely not with us Michiganders.

Will
Tue, 06/16/2020 - 4:23pm

How are people supposed to get things sorted out when there's literally no way to contact anyone at the UIA?

S Smith
Sun, 06/21/2020 - 10:53pm

This Was A Flawed System Before The Pandemic I Feel The State. Is Low On. Cash And Uses Any Bogus Excuse To Stop Payments My Account Is Frozen Due To A 24.000 Bal I Donot. Owe Was Told By Uia Unless I Make A payment Will Not Recieve Funds I Am Part Of Class Action Suit Against The State Of Michigan That Was Never Removed The Uia Is An Horrible Agency Ran By Crooks On The Website They Say Not One Michigan Account Has. Been Hacked No Way To Treat People That Need Their Money.That Berry Person Is A Big Liar

A hendrix
Mon, 06/29/2020 - 5:53pm

I was forced to go on furloughs not asked is there anybody at the unemployment office that give the common courtesy to communicate with these people.

Janet webb
Sun, 08/02/2020 - 2:04pm

I know several young adults who never worked getting 760 a week. This has to stop. What can I do?

Precious Cleve
Thu, 08/27/2020 - 5:11pm

How long does it take forth em to finish a fraud investigation

J Sheedy
Fri, 09/04/2020 - 3:36pm

Pay first and determine fraud later. It's not like the Government can't get money from someone when they want it. Hanging the citizenry out to dry on the off chance of some fraudsters is ridiculous. Especially when contact with Michigan Works is basically impossible. Guilty until proven innocent AND by the way you are going to have basically no shot at proving innocence because the UIA is unreachable.