More than $ 45 billion in unemployment benefits were embezzled in the United States during the pandemic when those benefits were expanded in the face of mass layoffs, according to a new rising estimate by the Labor Department’s enforcement services. Between March 2020 and April 2022, $ 45.6 billion in unemployment benefits were fraudulently collected, according to a report released Thursday by the US Department of Labor Inspector General.
This is $ 30 billion more than the previous estimate, released in June. And more than 1,000 people have been charged to date for their involvement in these frauds. These figures “underscore the scale of this problem,” Inspector General Larry Turner said in a statement, citing “historical levels of fraud and other abusive payments.”
20 million jobs destroyed in two months
The Covid-19 pandemic hit the US economy in March 2020 and, in two months, over 20 million jobs had been destroyed. The federal government has therefore opened the doors to unemployment benefits, increasing the amounts and duration of payments and broadening the spectrum of beneficiaries.
“In five months, more than 57 million people registered as unemployed,” said the inspector general’s office. This influx of claims, however, created a loophole for scammers, as states responsible for paying unemployment benefits struggled to cope with “the substantial increase in the volume of unemployment insurance claims and to determine that the benefits were paid to the right person and in the right amount ”, it is specified.
Outdated services
In particular, scammers have embezzled these funds by claiming benefits in different states or by usurping the identity of deceased or prisoners. According to the report, ministry departments “did not take sufficient measures to implement” the recommendations made in various warnings. Officials at the time acknowledged that some programs could carry risks, but stressed the need to deliver aid quickly.
Unemployment services had been completely overwhelmed by the unprecedented number of registrations due to Covid, highlighting a long-standing underinvestment. The images of men and women waiting hours in the car to be able to register had marked the minds. As well as the testimonies of those who waited weeks for an answer or a payment, and could not pay the rent or meet the daily expenses.
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