Almost a third of Colorado's unemployment claims were fake last week, suggesting massive fraud scheme at play

Almost a third of Colorado's unemployment claims were fake last week, suggesting massive fraud scheme at play

It isn't just cheating the government, but The People as well...

VicesJune 23, 2020 By Will Brendza

Over 55,000 people in Colorado have filed for unemployment benefits since this whirlwind of corona-crisis started back in late February.

It’s a hot story now — the unemployment rate. It’s higher than it’s ever been, and still, it’s lower this week than it was in April. It’s deflated from 12.2% to 10.2%, which is still a record high.

But, as the state and Federal government have started to realize, not all of those applications (or the payments that followed them) were legitimate — unemployment fraud has become a big problem in recent months. And the Feds are starting to catch on. Just last week, Colorado halted some $34 million of unemployment checks en route to their recipients, which had all been flagged as “suspicious.”

People are using stolen identities (phished via fake emails and/or other simple methods) to apply for unemployment in multiple different states. And they aren’t just applying for one check, one week at a time — these fraudsters are taking advantage of the unemployment’s backdating system, which allows people to apply for benefits from weeks and months prior. The idea is, if the pandemic affected your income back in March, but you only got approved for unemployment in April, you could still apply to receive the benefits from those previous weeks, when you were in-between.

It’s a surprisingly generous feature of the state and federal unemployment systems. (One that was necessary, considering how long it took for some people’s unemployment applications to be processed.)

However, fraudsters have been chashing in on that feature. They’ve been using stolen-identities to apply for many-months’-worth of unemployment for many different people, in states all across the US. Which is a lot of money, when you consider the fact that each week, each one of those identities is entitled to access $600 in federal aid. That adds up very quickly.

Which was why the Colorado Department of Labor just recently limited unemployment backdating to a single week.

“We’re now two months later, so it’d be somewhat illogical for someone who had legitimate impact on their income going back to February to just now be filing a new claim in June, and applying back dates all the way back to February,” Cher Haavind, the Colorado Department of Labor and Employment’s (CDPLE) deputy executive director, told the Colorado Sun.

Jeff Fitzgerald, Colorado’s unemployment insurance director, says that that measure is already working. “By eliminating the backdating — that change went into effect mid-week this week — we already saw about a 40% decrease in new claim activity.”

So, they’ve got a handle on the situation (for now). But, unfortunately for anyone whose identity might have been stolen and used for this particular breed of fraudulence, there’s no way of knowing if you were a victim. If your identity was stolen and used to inappropriately file for benefits, according Haavind, chances are you will never know.

That’s why it’s so important right now for people to be looking for indications of fraudulent activity or clues that their identities might have been stolen. Suspicious emails about completing an unemployment application you never started; or receiving an unemployment debit card you never applied for; or unemployment notifications from states you don’t live in are all Big Red Flags, according to the CDPLE. And they want to be notified. If you see any indication that your identity has been stolen and is being used to get unemployment money in Colorado, the state kindly asks that you email them at cdle_labor_fraud@state.co.us.

Meaning, essentially, that it’s on us to make sure we aren’t getting used to rip off the government. These unemployment dollars and those $1,200 stimulus checks have all come straight out of tax coffers, after all. It’s our money, and its singular purpose is to uplift those of us in true, dire need right now — an end many tax dollars never actually reach. 

So, when it’s stolen (or sent to dead people) it’s a worse crime than just cheating any government institution — it’s an offense against The People.