Labor Dept. officials asking for more time as fraud prosecution deadline looms
PHOENIX - For years, we have covered the massive unemployment fraud that took place in Arizona during the COVID-19 pandemic, with billions of dollars stolen in just the State of Arizona alone.
However, federal investigators fear a deadline in early 2025 might stop criminal investigations in their tracks if Congress doesn't act soon.
Unemployment a lifeline to many, and a problem for some
Unemployment insurance was a lifeline for tens of thousands of Arizonans following the start of the pandemic in 2020.
"We were struggling for a while, but now that we got the $600 additionally, it’s definitely taken a lot weight off our shoulders," said Tylor Zwick.
"That additional $600 is allowing me to breathe and pay some bills and stay on top of things and survive," said Vicki Underwood.
For others, however, it became a nightmare. Marisa Folz said she learned someone stole her identity, and filed a fraudulent claim.
"I can’t imagine how many people have no idea that this just happened to them," said Folz.
Prosecution deadline looms
Four years later, federal investigators are still trying to find the fraudsters that stole billions of dollars, but those criminal investigations are now at risk, thanks to a looming deadline.
According to the U.S. Department of Labor, unemployment fraud has a five-year statute of limitations. Cornell Law School's Legal Information Institute defines a statute of limitations as a law that bars claims after a certain period of time passes.
Officials say they are still receiving more than 100 fraud claims a week.
"These crimes involve complex schemes and resources and time to investigate," said U.S. Department of Labor Inspector General Larry D. Turner.
Officials say they have investigated more than 200,000 unemployment fraud claims, and convicted 1,300 for it, including some outside of Arizona who allegedly stole significant money from the Arizona Department of Economic Security.
Among those accused of taking part in pandemic-era fraud include former Phoenix news anchor Stephanie Hockridge and her husband, Nathan Reis. Hockridge worked for KNXV-TV (ABC 15) until 2018, when she left the station. Both she and her husband are indicted in connection with an alleged fraud scheme involving the Paycheck Protection Program, or PPP. Federal investigators claim the couple took out loans for themselves and charged others 10% fees to help them get loans, which is a violation of rules.
The Department of Labor wants Congress to double the timeframe they have to charge someone, like they did for PPP fraud cases. We have reached out to multiple members of Congress in Arizona to see if they'd be willing to increase the statute of limitations on these unemployment fraud cases. We have yet to receive a response.