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Unemployment benefits in NY: how many fraudulent claims have there been?

New York state has identified an appalling number of fraudulent unemployment claims during covid-19, but has come out swinging with federal prosecutions.

Unemployment benefits in NY: how many fraudulent claims have there been?
POOL REUTERS

Since the beginning of the pandemic, New York State has paid more than $65 billion in unemployment benefits to over 4 million New Yorkers. Compared to the amount paid out in all of 2019 which was $2.1 billion, the pandemic has forced payouts of over 30 times the previous year.

Among those millions of claims, New York State Department of Labor has identified over 425,000 fraudulent claims, continues PSA campaign warning New Yorkers to protect themselves against fraud.

In response, the Labor Department has referred hundreds of thousands of fraud cases to federal prosecutors and continues to work with law enforcement partners on the federal, state, and local level to hold fraudsters accountable.

“Unemployment fraud is sadly a scourge that we have to fight every day, but it is particularly despicable that criminals would use a global pandemic as cover to attempt to defraud our system,” New York state Labor Commissioner Roberta Reardon said in a statement.

“These benefits have been a lifeline for millions of New Yorkers over the last year, and every day our Office of Special Investigations is working to protect our system from fraud and abuse.”

How are fraudsters doing it?

Criminals are using real New Yorkers' identities - likely stolen during previous data breaches involving institutions like banks, insurance companies, and major employers - to file fraudulent claims and illegally collect benefits in the name of individuals who are not unemployed.

In response to this uptick in fraudulent claims, the Department of Labor Commissioner and Department of Financial Services have launched a public service announcement campaign, educating New Yorkers about how to protect themselves against identity theft.

New York economy bruised by coronavirus pandemic

New York State’s economy and in particular the jobs market, was battered and bruised over the pandemic; 1.8 million jobs were lost between April 2019 and April 2020.

Economic shutdowns and continued restrictions which affected the hospitality and entertainment sectors plunged 10 per cent of the state workforce into joblessness.

The worst hit area was New York City, which saw 578,000 jobs disappear between December 2019 and December 2020, amounting to a 12 per cent job loss rate. That’s double the national job loss rate of 6 per cent.

According to a report released by New York Governor Andrew Cuomo, the job market in the state won’t fully recover from the pandemic until 2025.

Report unusual correspondence or unexpected cash from state

The state has released guidance on how to spot if you’ve been a victim of unemployment benefit fraud.

Anyone who receives a monetary determination letter from the Department of Labor, but did not apply for unemployment benefits, should immediately report it to the DOL.

In addition, New Yorkers who receive the letter should take steps to proactively protect themselves, including those listed at report.com;

  • Reporting the identity theft to the FTC;
  • Filing a report with their local police department, if they wish; and
  • Reporting a misused Social Security number.