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More than 50 Michiganders charged with unemployment fraud; state expects number to grow

Posted at 10:51 AM, Dec 31, 2021

(WXYZ) — A new report shows a whopping $8.5 billion in fraudulent unemployment claims were sent out from March 1, 2020, to September 30, 2021, and that the Unemployment Insurance Agency also reportedly avoided paying out $43.7 billion in fraudulent claims in the same time period.

It's a lot of money and some people are outraged and think the state can do and should have done a better job at preventing scammers from taking advantage of the system.

Most of the money, $8.15 to $8.25 billion or 97 percent of it, according to the report, that was paid to fraudsters was federally funded. And as much as $249 million or nearly three percent of it was state funds.

According to a 2020 report, some of the fraud detectors were removed in the beginning of the pandemic to quickly get benefits out. Since that report, the UIA took steps to fix that, but the report says it was a contributing factor to the fraud.

"I think everything was rushed and maybe unemployment was given out too quickly without people paying attention. The state could have done more to be more organized about it, so it wasn't so easy for fraudulent behavior to happen," said Pamela Hamilton, a Michigan taxpayer.

And like other states, Michigan faced attacks on their unemployment systems. Rep. Steven Johnson called for a bipartisan investigation.

"Going forward, the House Oversight Committee is going to do a joint hearing with the Senate Oversight Committee to look into this further to see what actions led to this, what could have been done to stop this," said Rep. Johnson.

According to the state, about 54 Michiganders have been charged with unemployment fraud with that number is expected to grow.

Most of the cases involved identity theft. The suspects would file false claims, take ATM cards of the victims and withdraw the cash, using it to live a lavish lifestyles, buy designer items and more.

We reached out to the UIA for comment and asked if they could find out who did this and they replied," the UIA can eventually seek restitution, which is repayment of unemployment benefits a claimant was not entitled to receive."

A UIA spokesperson also pointed out that the "anti-fraud efforts cut the rate of cases involving imposter fraud and intentional misrepresentation to only 0.57%."

"I can't say I necessarily blame anyone at the state just because it was a panic, just like everything shutting down for a long time was a bit of 'we don't know what's going on.' I wouldn't feel comfortable pointing any fingers, but it's certainly a shame we wasted ... that kind of money," said Rick Gebhard, a Michigan taxpayer.

7 Action News also reached out to the U.S. Attorney General's Office and the Michigan Attorney General's Office and no one was available for comment. If you do find yourself a fraud victim, report it right away.

2020 Report Letter by WXYZ-TV Channel 7 Detroit on Scribd

2021 Report Letter by WXYZ-TV Channel 7 Detroit on Scribd