Arizona convicts 900 people, recovers $1.83 billion in pandemic unemployment fraud
State seeks billions in unrecovered pandemic fraud
Arizona is doing better than most states at cleaning up pandemic-related unemployment fraud claims but there is still a long way to go before recovering all of the missing funds. FOX 10's Steve Nielsen has the story.
PHOENIX - Arizona investigators are still filing charges against criminals who stole pandemic unemployment money, but a new report from the federal government says states aren't doing enough to claw back taxpayer money from those fraudsters.
We took a peek into how many dollars we've recovered here in Arizona.
The backstory:
Unemployment was a lifeline for hundreds of thousands of Arizonans who lost their jobs in 2020.
They got help, but criminals exposed that system in what's been called by some as the crime of the century.
Unemployment fraud impacting Arizonans
Local perspective:
At the height of the pandemic, we brought you Marisa Folz's story.
One of the first identity theft victims of pandemic unemployment fraud, according to the Arizona Department of Economic Security (DES).
"I can’t imagine how many people have no idea that this just happened to them," said Folz.
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DES officials: "tens of thousands" could be affected by unemployment filing scam
When FOX 10 first reported on the scam, dozens of people were believed to have been victimized.
Christine Lahaie is retired, but she got a tax form in the mail after her identity was stolen as well.
"I’m sure there are probably a lot of people who got that in the mail and said what the heck," she said.
By the numbers:
A report at the end of the pandemic found the state gave away $5.8 billion dollars in fraudulent unemployment money.
"Unprecedented by far," said Doug Holmes.
Holmes, with Strategic Services on Unemployment & Workers' Compensation, which represents the business community, says it takes a long time for states to claw back the money in investigations.
"Not only do you have the issue of who is the fraudster? But then, trying to track them down for purposes of prosecution," he said.
What is the federal government saying?
A new audit from the US Department of Labor finds state agencies need to do more to recover improper payments.
DES responded to that by saying they've now recovered $1.83 billion in fraudulent benefits.
They post quarterly convictions of unemployment fraud and said the state has convicted 900 fraudsters with hundreds more submitted for prosecution.
While the state is allowed to continue prosecutions, the federal statute of limitations on pandemic unemployment ended last month.
Holmes has petitioned Congress to increase prosecution time to 10 years.
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Labor Dept. officials asking for more time as fraud prosecution deadline looms
For years, we have covered the massive unemployment fraud that took place in Arizona during the COVID-19 pandemic, but now, federal prosecutors fear a looming deadline might stop criminal investigations.
What they're saying:
"You can still prosecute for regular unemployment fraud, but you can't prosecute for the other piece, that was the federal part that was included in the weekly benefit? Thats crazy," said Holmes.
Of the states the US Department of Labor looked at, the percentage of fraud they've recovered is in the single digits.
According to Arizona's numbers, our state is fairing far better at close to 30 percent.