(The Center Square) – A fraud expert says he is not surprised at the scope of fraud committed during the pandemic with unemployment benefits in Illinois.
Illinois has yet to disclose the amount of unemployment fraud that took place during the pandemic, and the actual amount may never be known. A state audit released last year found nearly $2 billion in federal money intended for one program was lost to fraudulent claims in Illinois. The state audit found that the Illinois Department of Employment Security failed to implement general information technology controls over the Pandemic Unemployment Assistance program. The total scope of fraud isn’t known.
State Rep. Adam Niemerg, R-Dieterich, this week asked Kristen Richards, the former head of the Department of Employment Security who now leads another agency, how much money was stolen, to which she did not have an answer.
“The United State’s Department of Labor, as last I left the agency in mid-January, is still working to quantify the number of fraud that was associated with the federal programs,” Richards said.
Tom Miller, the CEO of ClearForce, a people risk technology company and an expert in fraud detection, said Illinois should have had their guard up once the unemployment claims poured in.
“Anytime that the government is providing that level of funding for relief for businesses or individuals, I think the bad guys are going to have it on their radar 100% and they are going to figure out ways to get in there and take a piece of it,” Miller said.
A 2022 report from the U.S. Department of Labor’s Office of the Inspector General singled out Illinois for failing to submit the required information on the taxpayer dollars spent during the pandemic, including to fraudsters. The Inspector General said it is important to obtain the information in order to prevent fraud in the future.
Miller believes a portion of the fraud dollars went to repeat offenders.
“They were explicitly told that they weren’t allowed to apply for new government loans and fraudulently hid that again so they could get access to more taxpayer money,” Miller said.
At the federal level, the U.S. House Ways and Means Committee recently approved a bill that would let states keep 25% of any money they recover that was fraudulently obtained or improperly given out. House Republicans said they are hoping to incentivize states to recover some of the billions of dollars lost.
“Enough is enough,” said Ways and Means Chair Jason Smith, R-MO. “It’s time for Congress to go after fraudsters and recover the dollars that have been lost.”
Miller says preventing fraud has to be a layered approach.
“You’re going to have to have a variety of mechanisms, analysis and policies and procedures to try to limit fraud because the bad guys are always going to try to be creative and beat each one of these new solutions that’s put in place,” Miller said.