State Teams Up with Feds to End Unemployment Fraud

During the height of the COVID-19 pandemic, an estimated $8.5 billion was paid to potentially fraudulent unemployment claims, according to a recent audit.

At the peak of the pandemic, the Michigan Unemployment Insurance Agency was faced with 77 times more claims than it did in an average week prior to the pandemic, according to the report by Deloitte Touche Tohmatsu Limited.

Because of the fraud, the UIA is collaborating  with a U.S. Department of Labor initiative that will analyze challenges at the agency and recommend resources or processes to address fraud, case backlog and more.

“This will be an important tool in our arsenal for our continued fight against fraud,” said UIA Director Julia Dale. “Fraud won’t be tolerated, and UIA will do everything that it can to identify bad actors and bring them to justice.”

U.S. Department of Justice experts will work with UIA staff to understand agency limitations that were magnified during the COVID-19 pandemic.

One way fraudulent claims were able to be filed was by identity theft, using information of legitimate Michiganders to obtain money illegally. One such victim is Michael Gelmi of Holland, who  learned about a claim filed in his name when he received mail about an unemployment claim.

“I promptly called my employer to let them know of the fraudulent claim, and they pointed me to the correct direction to let the state know it was fraudulent,” Gelmi explained.

Although the claim wasn’t filed under his Social Security number, the issue prompted Gelmi to step up his security.

“I did feel a bit violated and wondered if there are other things out there in regard to my credit, etc. that someone else is using,” he said. “I have tweaked a couple passwords and processes since to be sure my identity is a bit more secure.”