Over the past few months, I have received mail at my address for a person with my last name, but the first name of “Nsume”. This mail is from the Michigan Unemployment Insurance Agency. This person had apparently applied for unemployment benefits using my address.
I have filed TWO fraud reports on line with the state agency; one when I first received a letter, and just this past week. I opened the letters, resealed them and “returned to sender – No such person at this address”. The last one says that this person received more than $5,000 in fraudulent benefits, and that he/she is required to pay restitution.
Guess what? According to my USPS notification to email, another letter for “Nsume” is arriving in the mail today or tomorrow. I’ll let you know if it is anything significant.
This person did not apparently use my social security number or name to obtain benefits, but that isn’t the case for other Michigan residents, or residents in other states, for that matter.
Detroit Free Press (May 28, 2020)
Across the country, consumers are being warned that fraud is on the rise relating to jobless claims. The U.S. Secret Service has already spotted trouble in Florida, Washington, North Carolina, Massachusetts, Rhode Island, Oklahoma and Wyoming.
“It is extremely likely every state is vulnerable to this scheme and will be targeted if they have not been already,” according to the Secret Service alert issued May 14.
The alert noted that a significant amount of fraudulent claims have used stolen ID information from school employees, first responders, as well as government employees. It is assumed, according to federal authorities, that the ring has a massive database to “submit the volume of applications observed thus far.”
Some data being used might belong to anyone whether they’re jobless or not. Retirees, for example, report receiving unemployment forms to verify their identity from the state when they didn’t try to make any claims recently.
The online con artists claim to be gig workers or self-employed workers in some cases to steal money from the unemployment system.
USA Today (Jan. 28, 2021)
Robert Pennock was surprised to see a 1099-G show up that reports $5,772 in taxable income. That’s money, allegedly, that he received in state unemployment benefits through the Michigan Unemployment Insurance Agency in 2020.
If he received unemployment benefits, it would be taxable income. But he was not laid off during the COVID-19 pandemic. He did not face any furlough. He never applied and never received state unemployment benefits.
Pennock works as a reading specialist for Hulsing Elementary School in Canton, Michigan. He teaches students from kindergarten through the fifth grade.
He did get a couple of clues in the summer that something was up. The human resources office for the Plymouth-Canton Community Schools spotted that unemployment claims were being made in his name in June.
He confirmed with HR that he did not file for unemployment. He’s thankful that his employer is trying to help him work out the mess.
He said he immediately went to the Michigan unemployment insurance website and filed both fraud and identity theft claims.
It appeared to him, he said, that those jobless claims were not paid out since he received letters in the mail that his unemployment claim was denied for various reasons.
“And I figured that would be the end of that,” said Pennock, 55, who lives in Plymouth Township, Michigan.
It wasn’t. He received the 1099 form in the mail around Jan. 22.
I’m sure that state agencies are overwhelmed, but if they aren’t reacting to fraud reports even months after they are made by citizens like me and Robert Pennock, then what should be done? Mr. Pennock contacted the office of his state rep in Lansing, 20th District State Rep. Matt Koleszar. That apparently got some action.
“Good news,” Pennock emailed me. “Thanks to Rep Kolezcar, someone from the UIA just called me. They are sending a corrected 1099 and directed me to Form 6349, available on the UIA website, which I am to complete and return. The form is titled ‘Statement of Identity Theft.'”
May be good news. Mr. Pennock had already filed a fraud report and an identity theft report earlier this year. My fraud reports went absolutely nowhere so far as I can tell. Maybe I will follow Mr. Pennock’s lead and contact my state representative.
Not only is this a headache for innocent citizens, but it is costing millions of dollars in tax dollars paid out for fraudulent claims. I also wonder if the state agencies have done enough to weed out fraudulent applications? The answer appears to be “NO”.
An independent report in November indicated that Michigan might have at one point through late May paid out up to $1.5 billion to such fraud.
Click above link to see the full report. Here are some excerpts:
…In March, UIA suspended first-payment review on claims, commonly referred to as the “10-day hold requirement.” The purpose of the first-payment review is to permit employers time to review initial unemployment claims filed by their employees. While first-payment review had the impact of slowing down payments to legitimate claimants, particularly those filing under PUA who don’t have a traditional employer, it also served as an opportunity to identify potentially fraudulent claims in the traditional state UI program. To address this finding first-payment review was reinstated for all new claims beginning in September.
Normally, claimants must submit an initial claim within 14 days of unemployment with no option to establish good cause for filing late. The CARES Act required states to backdate PUA claims to the date on which the claimant self-certifies that they lost income due to COVID-19, without respect to good cause for late filing. UIA permitted the same for traditional state UI claims, which was not required by law. To address this finding (and consistent with a recommendation from the U.S. Department of Labor), UIA implemented a benefit payment review for all backdated claims in June and implemented new procedures and provided additional guidance for and review of claims backdated more than four weeks beginning in October…
UIA has a number of methods for detecting potential fraud, including a technology platform called Fraud Manager which automatically screen claims for additional review. Because of a sequencing error introduced by a system developer, from April 5, 2020 until May 19, 2020 it was possible for a claim to be filed, certified, and a first payment made on the day it was filed before Fraud Manager could process the claim to determine whether there was a need for further review. This finding was addressed when UIA personnel identified the error and Fraud Manager was sequenced to run immediately after claim filing before certifications became available to the claimant.
There are several filters used by Fraud Manager to identify claims for additional investigation or review. In April, many of these filters were removed due to concerns that some filters were incorrectly identifying too many legitimate claims for review. This finding was addressed in the period beginning on May 22, 2020 through June 29, 2020 when these filters were reactivated, and additional filters added…
Additionally, DOL OIG has found that CARES Act programs are structurally vulnerable to fraud and improper payments due to the fact the Pandemic Unemployment Assistance (PUA) benefits were designed to assist workers who do not qualify for traditional unemployment benefits, and required states to allow these workers to self-certify their own eligibility. PUA and the Federal Pandemic Unemployment Compensation (FPUC) provided a $600 per week supplemental benefit paid to all recipients and required that state UI agencies backdate claims making the programs uniquely attractive to criminals.