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Sean D. Reyes
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Cracking Down on Unemployment Benefit Fraud

April 20, 2023

A letter from Utah Attorney General Sean D. Reyes this week urged congressional leadership to act against unprecedented unemployment fraud. As part of the Protecting Taxpayers and Victims of Unemployment Fraud Act, states can now keep some of the proceeds they recover from such crimes.  

States will be allowed to keep 25% of fraudulent payments they reclaim, along with 5% of overpayments. In the letter, it is estimated that over $163 billion in federal employment benefits may have been improperly paid, with fraud accounting for $59.1 billion. 

The letter illustrates some shocking examples of fraud.

“A California woman serving a life prison sentence for murder led a scheme to collect at least $2 million … using stolen identities; New York inmates ran a similar scheme; A member of the Romanian mafia stole more than $5 million from California’s unemployment benefits program; A Florida man used 13 fake credit cards to steal more than $170,000, which he used, in part, to buy a fancy laptop; and an Arkansas woman and her co-conspirators filed over 100 fraudulent unemployment claims in California, seeking nearly $1 million. This fraud has cost taxpayers billions of dollars—and sometimes siphoned off benefits from those who truly needed it.”

The pandemic caused unemployment rates to jump to levels not seen since the 1930s, with tens of millions of people out of work. The federal government responded with large emergency programs that helped many people. However, they also opened the door to what could be the largest fraud wave in U.S. history.

In all, ten state attorneys general signed the letter, sent by Tim Griffin of Arkansas.