BY ERSHAD KAMOL
kkhan@dominionpost.com
A state legislative audit found Workforce West Virginia was not set up to administer the number of unemployment claims coming in during COVID-19 pandemic.
This contributed to $82,722,187 of the estimated $1.8 billion West Virginia received to help those unemployed at that time going to fraudulent claims.
WorkForce Acting Commissioner Scott Adkins and public relations officer of the agency Regina Brogan did not reply despite several attempts to get comments.
“We do not provide comment on ongoing fraud investigations and matters like this,” said West Virginia Department of Commerce’s director of marketing and communications Andy Malinoski, on behalf of his agency as well as Adkins and Brogan.
An audit report prepared by Performance Evaluation & Research Division (PERD) shows unidentified scammers filed 22,974 false claims for unemployment benefits. Some even impersonated government officials, including Legislative Auditor Aaron Allred, Allred’s receptionist, Legislative Post Audit Division Director Justin Robinson and 17 other current and former employees of the Joint Committee on Government and Finance.
PERD submitted the report to the Joint Committee on Government Operations and also to the Joint Committee on Government Organization in December 2021. This report acknowledged West Virginia was not the only state to experience such fraud.
Three false applications were submitted using Allred’s identity. He could not be reached for comment. Robinson told The Dominion Post he heard that WorkForce West Virginia had received a false claim for using his identity, but he did not want to comment.
False claims using the joint committee employees were filed between July 2020 and May 2021, according to the PERD audit report.
The report indicates an employee of the joint committee received an Unemployment Insurance benefit debit card in the mail after attempts to notify WorkForce of a fraudulent claim.
The employee, according to the PERD report, failed to reach any WorkForce official. Eventually, the Legislative Services Division contacted WorkForce on behalf of the employee to return the debit card, according to the report, adding that the division got a reply from WorkForce acknowledging that it was “inundated with fraudulent claims.”
PERD’s Senior Research Analyst Chris Carney, in a written statement, told The Dominion Post that the evaluation division, under the Joint Committee, was ordered to investigate the COVID fund frauds after it was learned some claims involved Joint Committee employees.
The PERD audit found 12,441 fraudulent claims amounted to $23,042,322 under the Pandemic Unemployment Assistance (PUA) fund, 22,974 fraudulent claims amounted to $82,722,187 under the The audit report identified reasons these fraudulent filers were able to obtain the money illegally Federal Pandemic Unemployment Compensation (FPUC), and 10,533 fraudulent claims amounted to $797,645 under the regular unemployment benefits.
They were: the unprecedented number of unemployment claims to the two unemployment insurance programs – regular and PUA; lack of administrative capacity, technology and fraud prevention; and improper-payment detection at WorkForce.
The agency used to crossmatch claims for preventing fraud manually, which became next to impossible for processing 457,399 claims during the COVID pandemic in 2020, according to the report. In 2019, the agency processed 52,816 claims.
The report also indicates WorkForce’s manual claims process was not designed to process PUA claims, which allowed each claimant to self-certify their employment. The U.S. Department of Labor discouraged placing stops on self-certification. In addition, WorkForce was under the directive of the Department of Labor to pay claims as quickly as possible.
As of Oct. 6, 2021, Department of Labor’s Office of Inspector General (OIG) estimated at least $87.3 billion in improper payments, including fraud, were at risk of not being detected and recovered.
Other states reporting losses to fraudulent claims include California, $11 billion-$29 billion; New York, $1 billion; and Washington, $600 million.
According to the OIG, four areas where potential fraudulent benefits were paid have been identified: multi-state claimants, $3.5 billion; Social Security numbers of dead individuals, $58.7 million; federal prisoners’ IDs, $98.3 million; and suspicious email accounts, $2 billion.
The CARES Act allowed anyone who became unemployed due to COVID-19 to file for UI benefits in just one state, but the OIG found one claimant that used a Social Security number to file claims in 40 states. That person received a total of $222,532 in UI benefits from 29 states.
According to the OIG, the Department of Labor and individual states struggled to properly and timely implement the three key CARES Act UI programs (PUA, FPUC, and PEUC) primarily because states’.
information technology systems were not modernized, staffing resources were insufficient to manage the increased number of new claims and, according to state officials, guidance from the labor department was untimely and unclear.
The OIG report also indicates many states did not perform required and recommended improper payment detection; 40% of states did not perform required cross-matches, 38% did not perform required payment recovery activities, while 42% did not report CARES Act UI program overpayments as required.
WorkForce West Virginia told the PERD investigators the agency verified $121,986 as recouped from fraudulent claims as of as of April 29, 2021, and it expected to recoup another $3 million to $4 million by the end of 2021.
PERD could not say how much had been recovered by last month. Nor could it say if any scammer using the identity of government officials could be identified.
Carney said WorkForce would be the agency to answer those questions.
“This report was an informative report on the fraudulent unemployment claims received as a result of the COVID-19 pandemic, not a performance review of WorkForce. Currently, we do not plan to evaluate WorkForce,” Carney said.
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