Federal and state governments flooded the country with additional unemployment benefits during the worst of the pandemic. The combined programs paid out nearly $800 billion from March 2020 through July 2021, about five times the amount paid during the Great Recession in 2009.
The additional benefits provided essential help to millions of Americans who lost their jobs during the pandemic. However, the giant tranche of money and the rush to get the funds to individuals made an attractive target for fraud.
According to a performance audit released last December, Workforce West Virginia paid out nearly $83 million in fraudulent unemployment claims. The agency is still in the process of recovering some of the money, but its fraud unit does not have the manpower or the means to keep up.
That is why there is a bipartisan effort in the Legislature to pass SB 543. As our Brad McElhinny reported, “The bill authorizes the state’s unemployment commissioner to hire supervisory, legal and investigative workers to spearhead inquiries when the unit has reasonable cause to believe fraud has occurred.”
Investigating fraud is a huge job. Some of the cases are attempts by West Virginians who falsify their documentation, but many cases are more organized and linked to identity theft. For example, pre-pandemic Workforce documented approximately 500 ID theft attempts from 2017 to the start of the pandemic. In March 2021, at the height of the pandemic, Workforce flagged over 9,000 ID theft attempts in a single week!
Thorough investigations require additional prosecutorial authority that Workforce does not have, such as subpoena power. Workforce must rely largely on federal and state investigators to pursue cases. SB 543 would empower Workforce to gather more of the data so it can present cases to authorities ready for prosecution.
The directive to Workforce during the pandemic was to get these additional dollars in the hands of unemployed workers as quickly as possible. New programs were created on the fly to accommodate individuals who previously did not qualify for jobless benefits.
The workload at Workforce increased ten-fold almost overnight. That surge was accompanied by often sophisticated efforts by scofflaws to cheat the system. Those additional federal funds are no longer available, but the attempts to file fraudulent claims will not end. In fact, the pandemic inspired crooks to become more creative about how to steal from the system.
West Virginia must stay ahead of the game, or at least have the manpower and the authority to keep up. This enhanced fraud unit is essential to accomplish that, while also sending a message that attempts to bilk the system will be fully prosecuted.