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Massachusetts recovers $158 million after getting 58,000 fake unemployment claims in nationwide scam during coronavirus pandemic | #coronavirus | #scams | #covid19


Since announcing in late May it was targeted by a nationwide scam, the Massachusetts unemployment systems received at least 58,000 fraudulent claims, nearly losing $158 million.

Ernst & Young, who was contracted by the state Department of Unemployment Assistance to conduct a forensic accounting investigation, detected 58,616 fraudulent claims between the traditional unemployment system and the Pandemic Unemployment Assistance program, which provides benefits to self-employed people and contractors who lost work because of COVID-19.

The latest estimate captures fraudulent claims between March 8 and June 30. The state DUA says the state recovered $158 million but did not say how much money, if any, was not recovered.

Gov. Charlie Baker repeatedly declined to say how much money the state lost through the nationwide scam targeting unemployment systems. Washington state, one of the first to ring the alarm about the scam, estimates it lost “hundreds of millions of dollars.”

Baker said he would not comment on those estimates when asked by MassLive in June and declined to comment when asked by other reporters throughout the month.

“I’m not going to speak to any of the specifics on that. Washington was in fact sort of the canary in the coal mine on this. It was their experience that led to notifications that went to other states, including ours, to give us a heads up that we really needed to get aggressive about making sure there was representation on this stuff,” Baker said in mid-June. “It’s very important to us that people get the money they’re entitled to, but it’s also very important to us that they in fact be the people that their application says they are.”

When asked why PUA applications were still held up, Baker said the state is seeing “thousands and thousands of attempts to steal money from the unemployment trust fund.”

Like other states that closed during a surge of coronavirus cases, Massachusetts saw historic levels of unemployment. Between March 8 and June 30, the traditional unemployment system received 976,123 initial claims. The state has paid out 702,789 of them, according to data released Tuesday.

Another 183,144 claims have been denied, and a fraction of those were appealed. According to DUA, 26,098 appeals are pending.

The PUA system set up in mid-April has since received 649,764 claims. Nearly half of those, or 311,741, were paid, according to DUA.

Another 282,440 claims have been denied, and 43,911 appeals are pending.

The New York Times reported in May that a U.S. Secret Service memo suggests a Nigerian fraud ring was behind the scam and that it could lead to “potential losses in the hundreds of millions of dollars.”

Other states have detected unemployment fraud during the coronavirus pandemic. A Pennsylvania representative said in late May he believed up to 58,000 were affected within the state by a scam, the Pittsburgh Post-Gazette reported.

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