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California State officials said at least $ 11.4 billion in unemployment benefits had been mistakenly paid to fraud cases since March 2020, with some estimates as high as $ 31 billion.
About 10% of all unemployment benefits paid in California during the Coronavirus pandemic – which forced statewide closures and rising unemployment – implicated fraud.
17% of total jobless claims are investigated, reported the Los Angeles Times.
“There is no sugar in reality,” Julie Su, secretary of the California Labor and Workforce Development Agency, said at a press conference Monday. “California did not have sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”
California has paid $ 114 billion in 19 million jobless claims since the onslaught of the pandemic.
The state’s unemployment claims system, the Pandemic Unemployment Assistance Program – which allows unemployment benefits for those who would not normally be eligible, such as independent contractors – has reportedly shown earlier indications of fraud, including as recently as last week.
“It’s no surprise that EDD has been overwhelmed, as have the rest of the unemployment agencies across the country,” Su said. “As millions of Californians called for help, international and national criminal networks were at work behind the scenes, working tirelessly to steal unemployment benefits using sophisticated methods of identity theft.
Su also partially accused the Trump administration of failing to help states provide pandemic relief services, the California publication reported.
The response to the surge in fraudulent cases could also mean that legitimate claims are at risk as state officials froze 1.4 million claims at the end of last month – of which 1.2 million are still frozen for that the investigations are completed.
A third-party contractor, known as ID Me, has been hired by the state to help verify the identity of the claims filed. About 30% of claims filed between October 1 and January 11 were blocked on the basis of suspected fraud, the Los Angeles Times reported.
California has seen more than 3.1 million confirmed cases of the coronavirus, with more than 37,500 deaths since March.
News Highlights Business
- According to the source California unemployment fraud claims for 2020 could exceed $ 31 billion
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