States Snag $240M to Combat Unemployment Fraud

guest · Aug 21, 2021

States Snag $240M to Combat Unemployment Fraud
August 19, 2021
https://www.nextgov.com/cybersecurity/2021/08/states-get-240m-combat-unemployment-fraud/184630/

Fraudsters were busy during the coronavirus pandemic, and state unemployment systems have been a prime target for theft.

California, which has been hit particularly hard, appointed a special counsel to investigate fraudulent claims, which account for at least $11 billion in unemployment the state has paid out. In six weeks, the Maryland Department of Labor detected 508,000 fraudulent unemployment claims. And federal prosecutors uncovered one instance of an individual filing fraudulent claims in at least 17 states using the same social security number.
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o address the issue, the U.S. Department of Labor announced it will allocate $240 million in grants to states to bolster fraud detection and prevention efforts. The money includes $100 million in leftover CARES Act funding and $140 million from the American Rescue Plan.

“While states mobilized quickly to implement new crucial pandemic unemployment programs, they were hamstrung by outdated technology and a lack of resources that made them vulnerable to fraud from international crime rings,” the Labor Department said in a fact sheet explaining the grants.
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The state grants can be used to strengthen identity verification for those filing for unemployment insurance, enhance fraud detection and prevention strategies, improve data management and analytic capabilities, increase cybersecurity, or expand overpayment recovery efforts.

“When you see the amount of digital fraud over the last year, everyone is looking at modernization through the lens of cybersecurity,” he said. “If you can establish a baseline of who someone is it will make it a lot harder to steal someone’s identity.”
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States Snag $240M to Combat Unemployment Fraud

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