Labor Department Releases Memo Showing Over $45 Billion In Unemployment Fraud

The Labor Department’s Office of Inspector General issued a memo on Sept. 21 showing that estimates on unemployment fraud have ballooned to $45.6 billion.

The inspector general explained in the memo that the high-risk areas of fraud were multistate claimants, deceased persons, suspicious emails, and federal prisoners.

At almost $29 billion, multistate claimants made up most of the fraudulent cases. Unemployment insurance is only supposed to be paid to claimants in one state, but the inspector general found nearly a million social security numbers that were used to file unemployment claims in two or more states.

According to the report, there were 205,766 social security numbers of deceased individuals used in the perpetration of unemployment fraud.

The memo explained that many of the fraudsters hid behind anonymous email accounts, filing unemployment claims that accounted for roughly $16.2 billion in fraudulent funds.

While they did not have updated federal prison data, the office confirmed that social security numbers of ineligible federal prisoners were being used to cash in on unemployment claims. As of June 2021, the amount was over $267.3 million.

Since the beginning of the pandemic, more than 1,000 people have been charged with crimes related to unemployment fraud. Just this week, the Justice Department announced charges against 47 people for fraudulently obtaining pandemic aid in the amount of $250 million that was supposed to go toward children in need.

“Hundreds of billions in pandemic funds attracted fraudsters seeking to exploit the UI program—resulting in historic levels of fraud and other improper payments,” wrote Assistant Inspector General for Audit Carolyn R. Hantz in the memo.

The $45.6 billion estimate is up considerably from the $16 billion in potential fraud the department estimated back in June 2021.

Since March 2020, the federal government has issued a total of $872.5 billion in unemployment funding related to the pandemic.