ADOL investigating 340,000 unemployment claims for potential fraud

ADOL estimates around 1.1 Billion in federal and state dollars was taken due to the sheer...
ADOL estimates around 1.1 Billion in federal and state dollars was taken due to the sheer number of fraudulent claims. 5.5 Billion was blocked from being sent out.(Source: WSFA)
Published: Jan. 5, 2022 at 10:52 PM EST|Updated: Jan. 5, 2022 at 11:15 PM EST
Email This Link
Share on Pinterest
Share on LinkedIn

MONTGOMERY, Ala. (WSFA) - Millions of dollars meant to help those struggling to find work during the pandemic went to criminals instead. Federal stimulus checks and weekly jobless benefits proved to be too tempting for a number of thieves trying to get checks with stolen identities.

Tara Hutchison with the Alabama Department of Labor says alongside law enforcement, the department is investigating 340,000 potentially fraudulent pandemic-related unemployment assistance claims.

“Fraud is always going to occur. There’s always been fraud in the unemployment compensation system and the programs, but never, never to this extent,” Hutchison said.

ADOL did estimate, however, that 43% or nearly half of those 340,000 fraudulent claims were flagged by the department as fraud and not a single dollar was sent out. In other words, somewhere around 146,000 of the claims were blocked by ADOL.

“It was inevitable. It was almost impossible to prevent all of that fraud from happening, but we were successful at stopping almost half of that fraud from ever occurring,” Hutchison said.

ADOL was faced with the same problem as every other state in the country during the pandemic - a tsunami of unemployment claims.

“We’ve never paid out as much money as we paid out during the pandemic. Never had as many claims filed,” Hutchison said.

Thousands of Alabamians suddenly jobless turned to new federally funded pandemic related unemployment programs approved under the CARES ACT.

“That was the additional $600 at the beginning, $300 at the end, that was added on to every other unemployment payment,” Hutchison said.

Those additional funds became irresistible to criminals. A number of them filed false claims, and some of them got creative with how to steal.

“We had so many scammers that were targeting the unemployed, that were impersonating us,” Hutchison said.

Among the programs available was the Pandemic Unemployment Assistance fund, or PUA. That program allowed people who are self-employed to file for unemployment. Something that had never been done before.

Those who are self-employed do not normally have wage records filed with the state so finding proof of employment in order to qualify for the unemployment benefits was a challenge, Hutchison said.

Overall, ADOL estimates around $1.1 billion in federal and state dollars was stolen. All the while, $5.5 billion was blocked from being sent out.

“We were able to stop five times as much, which I believe is certainly something that we could be proud of,” Hutchison said.

Hutchison said that of the $1.1 billion that was taken, about 10% of those dollars were from the state. She estimated that would be somewhere around $150 million.

According to ADOL’s unemployment benefits and claims paid dashboard, around $5.2 billion has been paid out to Alabamians from state and federal benefits since March 16, 2020.

Hutchison said so far no one in the state has been prosecuted for filing a false claim. She said the department is working daily with federal and state agencies to track down these crooks and hold them responsible.

“People who committed these crimes need to be punished for it,” Hutchison said.

Hutchison projected that it could take years, possibly even decades, for every single person who stole money to be caught.

ADOL asks that you be on the lookout for criminals trying to take advantage. They say its extremely important you keep your personal information private.

If you get a letter from the department letting you know a claim for unemployment benefits had been filed and you didn’t file the claim, ADOL asks that you report it to them immediately. You can do that online.

Hutchison added that the states unemployment rate remains at 3.1%. Alabama has held steady there for about three months now. The state was at a record low unemployment rate of 2.6% before the pandemic.

Copyright 2022 WSFA 12 News. All rights reserved.