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 The U.S. Department of Labor criticized Illinois
for failing to report data on fraudulent pandemic unemployment payments, stating
future fraud is hard to prevent when past fraud isn’t tracked.
Illinois lost over half of its pandemic unemployment funds to fraud, according
to a state audit.
“Without accurate state performance information, Congress and the [Employment
and Training Administration] are not able to fully assess state activities and
mitigate the risk of overpayments and fraud for future programs of a similar
nature,” the report stated.
A separate report from Illinois Auditor General Frank Mautino found about $1.9
billion of the $3.6 billion distributed from July 2020 to June 2021 was paid to
illegitimate accounts.
Online chat rooms offered tutorials on how to scheme Illinois’ unemployment
benefits through identity theft, according to David Maimon, criminology
professor at Georgia State University.
“We see many identities, many bank accounts, many driver’s licenses that are
associated with Illinois residents” for sale on the dark web, Maimon said.
State administrators said they’ve updated their software to improve security.
The Illinois General Assembly additionally passed two new laws Aug. 5 extending
the statute of limitations for prosecuting fraudulent stimulus loans and
identify theft.
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Haywood Talcove, CEO of LexisNexis Risk Solutions, said there’s still a danger
even with the new protections in place.
“They’re claiming it’s fixed, and I’m telling you, it’s not fixed,” Talcove
said.
One of the major funds for those out of work was Pandemic Emergency Unemployment
Compensation. Illinois was one of four states that didn’t report required PEUC
overpayments for any quarter from March 2020 through September 2021.
IDES officials blamed the fraudulent payments on a lack of proper guidance from
the federal government. An early investigation by the Chicago Tribune showed the
fraud in Illinois was exacerbated by IDES failing to follow federal
recommendations or adopt free fraud-fighting tools.
IDES faced a litany of problems handling the pandemic, including an unemployment
website making it easy for identity thieves when it exposed Social Security
numbers and other personal information of 32,483 Illinois unemployment
applicants after it first went online. Applicants faced months of delays in
receiving benefits and more than 200,000 claimants at one point were awaiting a
call about their benefits.
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