Unemployment fraud continues to be a monumental problem nationwide. In Virginia alone, more than $100 million of taxpayer money was paid out to fraudsters since the start of the pandemic, according to the Attorney General’s Office.
Kevin Kinnett owns a small plumbing company in Northern Virginia, and last summer he received more than 100 fraudulent unemployment claims from people who never worked for him. He filed a complaint with the Virginia Employment Commission (VEC). A fraud investigator told him, while the VEC has no way to stop the letters from coming, they could try to pinpoint the origin of the filers. But five months later Kinnett learned the state instead paid out thousands of dollars in benefits to two of those fake employees.
“So, my question to the VEC is: There was a news story about this, there was fraud on my account, and they still got through? I thought I had all the stops in place. How can this happen?” said Kinnett.
That’s a question other states are grappling with. According to the U.S. Department of Labor, at least $87 billion was likely lost to “improper payments” with fraud being a significant portion of that during the pandemic. Identity theft expert James Lee says now that fraudsters know they can get the money, it’s a problem that’s not likely going away.
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"This is not a part of the government infrastructure we've ever invested in. So now we're having to play catch up, and how do we prosecute these crimes? How do we even identify there was a crime? And what do we do to prevent it from happening going forward?” said Lee, the COO of the Identity Theft Resource Center.
The VEC has seen a 400% increase in unemployment insurance fraud in the past 24 months. The agency had been relying on local commonwealth attorneys to prosecute these cases, but as the cases piled up, it proved to be too much for one agency to handle. The VEC is now turning to the state’s top law enforcement agency for help.
Gov. Glenn Youngkin and Attorney General Jason Miyares announced that the attorney general has signed an agreement with the VEC to prosecute fraudulent claims for unemployment compensation.
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“If you want to go after the bad actors that are stealing this money, we are ready, willing and able to assist,” said Miyares.
"We've gotten some good progress, but there is so much work that's left to be done,” said Carrie Roth, VEC’s newest commissioner.
She says this partnership will go a long way to improve the agency so they can focus on getting Virginians the benefits they deserve.
"Right now, we’ve been focused on the backlog and reducing the backlog, in particular including those folks that had unpaid pending claims. We had 25,000 and brought that number to below 9,000,” said Roth.
As for Kinnett, he's still waiting to hear back from the VEC and worries about the potential financial toll on his company from this fraud.
"I want answers to why,” he said. “Why this money was taken out of my account, and I wanted to know what, what ramifications or impact to my business that this is going to cause."
A spokesperson for the VEC did confirm that money was paid out from Kinnett's account and is being investigated.
Experts say most often the names used on these phony unemployment claims like he received are stolen identities.
Resources for victims of unemployment fraud:
Reported by Susan Hogan, produced by Rick Yarborough, shot by Steve Jones and Joe Cassano, and edited by Steve Jones.
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