Washington unemployment fraud might be up to $650 million

By Rachel La Corte / Associated Press

OLYMPIA — Washington officials said Thursday they believe they have recovered about half of the hundreds of millions in unemployment benefits paid to criminals who used stolen identities to file claims during the coronavirus pandemic.

Employment Security Department Commissioner Suzi LeVine said officials are still working to determine the final amount paid out fraudulently, but they believe it was between $550 million and $650 million. To date, the state has recovered $333 million, she said.

“We do believe there is still a significant amount we can get back,” she said.

The number of new claims for unemployment benefits in Washington dropped to just over 31,000 last week. LeVine said the drop is in part because of the ongoing anti-fraud efforts and because the economy is restarting under the state’s four-stage reopening plan that is bringing people back to work.

A West African fraud ring using identities stolen in prior data breaches, such as the massive 2017 Equifax breach, is believed to be behind the fraud, which has targeted nearly a dozen states, according to California cybersecurity firm Agari.

LeVine said that of claims that have been held up because of identity concerns, the claims of more than 51,000 people were resolved Wednesday night, and that $77 million in funds will be released to 32,000 people Thursday. The remainder have separate questions about their applications that require additional resolution, she said.

An additional 50,000 claims will take more time to resolve because LeVine said she believed about half of them to be fraudulent.

“The fact that innocent people are caught in a fraud net — which means their payments have been stopped or delayed — is the most infuriating and disheartening part of this effort,” she said.

More than 774,000 total claims for benefits — with some of that number reflecting people who filed multiple claims — were filed for the week of May 24-30, and more than $514 million was paid to 400,352 individual claims.

To date, the state has paid more than $4.9 billion in benefits to more than 826,000 people, including federal money that is providing the unemployed with an additional $600 a week on top of the state’s weekly maximum benefit of up to $790 per week.

Since March, nearly 43 million people nationwide have filed for unemployment aid because of the economic damage of the coronavirus.

The state’s unemployment rate jumped to a record 15.4 percent last month after businesses closed or reduced operations under a stay-at-home order that expired Sunday night. Counties are currently moving forward under the four-stage reopening plan.

As of Thursday, 27 of the state’s 39 counties have been approved to move into Phase 2, and six have applied to move into Phase 3.

More than 22,400 people in Washington have tested positive for the coronavirus, and at least 1,135 have died.

The virus causes mild to moderate symptoms in most patients, and the vast majority recover. But it is highly contagious and can cause severe illness and death in some patients, particularly the elderly and those with underlying health conditions.