Fraudsters are nothing if not consistent. They follow the money and seize on chaos and confusion. So when an unprecedented pandemic spiked the U.S. civilian unemployment rate from a near full employment level of 3.5% in February 2020 to 14.7% two months later, it should not have come as a shock that historic fraud followed.
The filing of bogus claims for unemployment insurance benefits soared during the COVID-19 pandemic, aided by the scramble to get financial help to out-of-work Americans. With expanded qualifications for unemployment benefits and more applications than ever, unemployment insurance — already a familiar fraud target — landed squarely in the sights of criminals.
The fraud was epic in scale and sophistication. While opportunists were operating on their own, teams of bad actors often filed for millions in false claims across multiple states. The inspector general for the Labor Department estimates that fraudsters may have stolen $45.6 billion from the nation’s unemployment insurance program during the pandemic.
Unemployment has eased, but a key takeaway for Federal and state agencies is the need to put in place processes and technologies that accelerate the delivery of benefits to Americans who legitimately qualify for help while also implementing tools to rapidly identify and screen out illegitimate applicants and block fraud attempts. The need to address these objectives concurrently was effectively summarized in the recently released National Institute of...
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