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

At least 540,000 accounts were frozen starting in late May as officials responded to warnings from the U.S. Secret Service that stolen identities were being used across the country to open fake Unemployment Insurance Agency accounts. (Shutterstock)

Michigan could have more than 100,000 fraudulent unemployment claims filed by scam artists across the globe, according to the Michigan State Police.

State officials aren’t saying how much money Michigan has paid out to fake accounts. But those fraudulent unemployment claims have slowed the payment of hundreds of thousands of legitimate claims by Michigan unemployed, as the state tightens the screws on verification.

In a Friday update on jobless benefits, officials said at least 60,000 unemployed workers were cleared to receive payouts over the past week as the state attempts to verify identities of people receiving benefits and works through a massive backlog.

At least 540,000 accounts were frozen starting in late May as officials responded to warnings from the U.S. Secret Service that stolen identities were being used across the country to open fake Unemployment Insurance Agency accounts. Of those, 340,000 were active accounts already approved for benefits and 200,000 were accounts that had not yet been approved when they were frozen.

 

The fraud investigation step was the latest slowdown in a system under fire since Michigan’s jobless totals skyrocketed to 2.1 million starting in late March, resulting in lengthy payment delays and questions about the overloaded system. As UIA works through verification, Michigan residents and lawmakers continue to raise concerns about ongoing delays with payments.

However, as the number of suspected fraud cases is narrowed, the state says payments are starting to reach jobless workers caught in the investigation.

“We are doing everything in our power to pay eligible claimants as quickly as possible, while avoiding paying criminals,” UIA spokesperson Jason Moon said.

The state has paid $11.4 billion in benefits since the coronavirus crisis. The maximum weekly benefit is $962, which includes the state maximum of $362 and an additional $600 per week from the federal Pandemic Unemployment Assistance.

About 140,000 people with active accounts still need to go through an enhanced identity verification. Meanwhile, another 37,000 claims remain on hold for other reasons. 

“We are using every available resource to verify the identity of legitimate claimants whose payments are held due to increased criminal activity,” said UIA Director Steve Gray in a news release.

The state so far does not know for sure how many of the 100,000 potentially fraudulent claims will prove to be fake.

“We are trying to determine that,” said Moon.

The UIA said international criminal organizations could be responsible for the fraud, which involves stolen identities from places like Eqifax, eBay and many other sources that allowed people to set up imposter accounts, pose as workers and obtain illegal benefits. 

Forensic accountants will be working with the state to home in on the extent of the fraud. The goal, Moon said, is identifying people responsible and getting them “quickly turned over to law enforcement for prosecution.”

According to the Michigan State Police, a state task force led by Attorney General Dana Nessel 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.

Meanwhile, Gray is scheduled to testify Wednesday before the Joint Select Committee on the COVID-19 pandemic. He was asked by its chairman, Rep. Matt Hall, R-Marshall.

“I am concerned over the continued lack of transparency and forthrightness from the department regarding the number of people statewide who are still waiting on payments for their unemployment claims,” Hall wrote to Gray in early June.

The committee also met Thursday, when lawmakers raised the idea of reopening the state’s regional unemployment offices as a solution to the difficulty residents continue to express about contacting UIA and resolving sometimes easy-to-fix concerns.

State Rep. Sara Cambensy, D-Marquette,  sent a letter on June 12 to Gov. Gretchen Whitmer saying the Michigan Unemployment Insurance Agency needs to reevaluate how it’s responding to its caseload. Reopening the offices is an idea the UIA said Thursday it was considering. 

The UIA has been “completely overwhelmed by the largest number of cases filed in the history of the department,” according to the letter signed by 11 other lawmakers, 10 Democrats and one Republican. 

However, an advocate for unemployed workers said this week that the pace of verifying identities during the fraud investigation appears to be effective.

“The state does seem to be processing them quickly,” said Rachael Kohl, an attorney leading the University of Michigan Workers’ Rights Clinic. “Many people who called us a week or two ago about this have been cleared and are receiving benefits again. 

“All in all, I have seen a lot of progress and there have not been that many calls or emails about this issue. “

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Comments

Agnosticrat 2.0
Fri, 06/19/2020 - 5:15pm

If you have been laid off and haven’t been able to collect your unemployment payment , tell your president to ask his buddy in Russia to give the money back!
He can just go on television and say “Russia if your listening....”

Little fish BIG pond
Sat, 06/20/2020 - 10:46am

I have a claim from March through current. I have not received a dime! NO calls go through, can't chat because it always says "Due to heavy chat volumes..." blah blah blah. I have sent emails, and messages via the web and absolutely no contact other than a letter saying "You need to verify your identity. Fax your license and social security card to Xxx". If anyone at the UIA reads this.... You can quote this: NO ONE IN THEIR RIGHT MIND WOULD FAX THIS INFORMATION! There are zero representatives at any of the Michigan Works offices. The actual UIA offices are locked up nice and snug. So how do we contact anyone? Come on now, are you really trying to prevent fraud? On an unsecured telephone line to a number no-one knows? Who is sitting at that fax machine? Where is my information going? Is this information being destroyed? Not very good handling this "Pandemic".

Tim W
Sat, 06/20/2020 - 3:28pm

With 540000 accounts on hold and processing 60,000 claims per week that would take approximately 9 weeks to process all of them. 8 weeks to go.

Plus an unknown umber of applicants have yet to get UIA form 6347 to file with your pieces of identification. We have a long way to go folks.

April Blackett
Sat, 06/20/2020 - 6:47pm

The problem is also that if you're one who has missed a phone call from the uia office they leave a name and tell you to call back to the main 866 500 blah blah blah you don't get through so now what

Karen
Sun, 06/21/2020 - 1:58am

Many many many concerned people want to work but are deathly afraid of the Covid 19 .. So please its been depressing hearing that they dont want to work because unemployment is better for them. They do deserve to get paid more. Especially during Covid 19 The unemployment has shown many many good people that our system cares... And they are not a lab rat
For disposable purposes

Henry
Sun, 06/21/2020 - 7:29am

I know of so many people receiving unemployment that should not be. Like one woman I know who is working still under the table and collecting And she's redoing her home with the money.

middle of the mit
Mon, 06/22/2020 - 1:48am

Notice how there is not a single post on here complaining about ID fraud, UIA fraud or any type of fraud?

Notice how when Bridge posts something about Vote By Mail, the commenters come out of the woodworks to tell us all about fraud?

I got my application from the S.O.S. the other day. Nobody stole it from my mail box, and I didn't see an army of youth or dead people or anyone marching down my street to collect the envelopes that the S.O.S. mailed to us that day.

So......do you think the same thing would happen when my actual ballot arrives? How would they know? And will it arrive at everyones mailbox on the same day?

Come on man!

But fraud over the UNREGULATED INTERNET? NO! That can't happen!!

And whatever you do.......

DON'T BLAME IT ON THE PRIVATE CREDIT RATING AGENCIES who have all been hacked!!!

They are sacrosanct!

It's Governments fault! Always has been, always will be until Government is no more. Then it will be YOUR fault!

Those ARE THE TERMS OF SOCIETY.

Sorry I had to put them that way.

Show me different.

Chris
Mon, 06/22/2020 - 11:55am

It will probably turn out that the state could have walked the checks to the front doors of the verified and deserving applicants for less than they’ll lose to the fraudsters. As a centrist democrat this is what I hate about big government - put a big, well intentioned program in place and then fail to manage it professionally - fail to consider and plan for worst case scenarios that would crush it. Or as with Florida, allow it to be managed to the political whims of bad, albeit elected, actors like Rick Scott who engineered Florida’s unemployment system to deliver little, frustrate anyone in need and generally fail. Epic Fail and the taxpayer must support it all!

Anonymous
Wed, 06/24/2020 - 10:16pm

I just want to see the fraudsters arrested and put in jail, but they're from overseas. Doesn't that make them enemies of our country?

Sarah Castles
Tue, 06/23/2020 - 8:00pm

Why does the write add a telephone number to reach a lawyer to contact. I have not received one dime sine laid off my job in March. I submitted all paperwork. And still no response. I am at my end to be out on the street. I wish I could due theses scammers.

jerry liversedge
Mon, 06/29/2020 - 4:33pm

i havent gotten cleared yet i cant even talk to them i call and call and when i do get through i get the same recording telling me that my case is under review and to check online and the mail but the payment i was due has been whiped from the website.