State unemployment fraud cases top 120K, driven by nationwide exploitation of new federal program

Gov. J.B. Pritzker gives an update on unemployment fraud at a news conference in Chicago.

SPRINGFIELD – The state has identified more than 120,000 instances of fraud in its unemployment system since March, approximately 114,000 of which targeted the federal Pandemic Unemployment Assistance program that has been ripe for exploitation nationwide, according to the FBI.

That program, passed by Congress as part of COVID-19 relief efforts, allows independent contractors and others to apply for unemployment benefits they would otherwise not be entitled to. The program launched in Illinois in May.

Gov. J.B. Pritzker said at a COVID-19 update in Chicago Wednesday the federal program was “poorly designed,” and fraud calls have exacerbated issues state unemployment systems are already having in processing claims.

“This is a brand new program that the federal government rushed to develop, and then left each state to create its own separate system,” Pritzker said. “As a result, there were massive holes for illegal fraudsters to steal federal dollars from taxpayers across the country.”

He said the state has been asked to cooperate with federal investigators, and noted that anyone who has not applied for unemployment benefits but receives either a debit card or correspondence from the Illinois Department of Employment Security should report it.

“In addition to working with law enforcement, IDES is also taking every action to track down and cut off fraudulent claims, reviewing flagged files to identify commonalities and patterns,” Pritzker said. “The highly experienced money launderers who have perpetrated these crimes use the same payment methods that regular filers do. For that reason, the IDES can’t simply cut off common dispersal mechanisms that also serve as lifelines for innocent users.”

Pritzker said IDES has processed more than 2 million total claims in 2020, so the number of fraudulent claims “pales in comparison to the number of Illinoisans in genuine need of assistance.”

The number of continued unemployment claims in the state remained historically high Thursday at 629,814 despite a decrease of nearly 19,000 from the previous week.

The Illinois Department of Employment Security also announced Thursday that 20 weeks of state extended benefits are available to those who exhaust the allotted 26 weeks of regular state unemployment and the additional 13 weeks of federal Pandemic Emergency Unemployment Compensation benefits.

IDES encouraged those with unemployment questions or to report fraud to visit IDES.Illinois.gov first before calling the unemployment hotlines, which continue to receive a high volume of calls. Those reporting fraud will be called back in the order of submission.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

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