The Labor Department is giving $240 million to states for measures like beefing up cybersecurity defense and identity verification in a bid to fight an explosion of unemployment insurance fraud.
“The pandemic underscored the need for modernization of the 53 different systems that administer unemployment insurance benefits in the United States, and it exposed significant vulnerabilities in state technology to criminals looking for an opportunity,” Secretary of Labor Marty Walsh said in a statement.
Another $100 million will be allocated to help states combat fraud in the temporary Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs, which were established by Congress to provide additional aid to the jobless amid the pandemic. Funding for these grants will come from unused portions of the CARES Act.
“What we’re seeing now is really terrifying,” she told the outlet.
“Following the passage of the CARES Act, fraud against the UI program exploded,” the DOL-OIG stated in a note on its website. “Working with our federal and state partners, we have been able to identify billions in potential UI fraud nationwide.”
The DOL-OIG has opened over 17,000 complaints and investigations relating to potential malfeasance with regard to unemployment insurance benefits paid under federal pandemic aid programs.
“As a result of the surge in complaints, UI investigations now account for 87 percent of the OIG’s investigative case inventory, compared with 12 percent prior to the pandemic,” the DOL-OIG stated, noting that the office has taken a range of actions in response, including hiring additional criminal investigators.