Categorized in: Fraud

Tags: coronavirusCOVID-19

Published: June 3, 2020

Criminals, suspected to be part of an international crime ring, have targeted the state’s Employment Security Department and are filing fraudulent unemployment claims using the names and personal information of real people to steal public money.

Governments and private businesses across the state have seen a big increase in fraudulent claims, many even filed in the names of current employees.

Here are a few questions and answers regarding this fraud.

Q: Do other state agencies or local governments need to report this fraud to the State Auditor’s Office, since state law requires such reporting for a known or suspected loss of public funds?

A: No. In this case, ESD was the only agency required to report this information to SAO right away, and they did so.

Q: What should a public agency do if a fraudulent claim is made on behalf of former or current employees?

A: ESD has asked those whose identities were used to file for fraudulent claims to report that fraud on its secure portal: www.esd.wa.gov/fraud. This can be done by individuals or businesses. If your agency receives a letter from ESD regarding a claim, and your employee didn’t file the claim, we recommend you report the fraud on their behalf, but also inform the employee. Again, the employee should visit ESD’s website to report the fraud and learn how to protect their identities.

More information on what to do can be found on ESD’s unemployment benefits fraud website

ESD has also created a flyer that you can share with your employees if they are teleworking, and also posted in prominent places for those who might be in the office.

Q: What is the role of the State Auditor’s Office in auditing ESD, particularly the circumstances that surround this fraud?

A: ESD is subject to a several types of audits on a regular basis. The agency’s 2018-19 accountability audit began before the pandemic, and therefore likely will not address these more immediate circumstances. SAO also is currently evaluating the department’s internal controls over premiums and claims, which appear to have changed as the state began paying benefits under the federal CARES Act. The results of this evaluation will be included in the 2020 state financial statement audit, the CAFR, which is anticipated to be released toward the end of the year. Finally, ESD is part of the annual statewide audit of federal funding, also called the “single audit.” The unemployment insurance program will be considered for a federal grant review. That report is scheduled for release in the spring of 2021.

Q: What is the role of the State Auditor’s Office in investigating this fraud?

A: SAO investigates fraud that occurs within a public agency and that is perpetrated by public employees. Frauds of this nature – perpetrated by external actors – are investigated by dedicated fraud units within public agencies as well as law enforcement authorities. In this case, ESD’s fraud investigators as well as the FBI and Secret Service are working on the case.

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Categorized in: Fraud

Tags: coronavirusCOVID-19