California officials confirm over $11 billion in unemployment fraud during pandemic

California officials confirm over $11 billion in unemployment fraud during pandemic

California officials confirmed on Monday that over $11 billion in unemployment benefits paid amid the ongoing coronavirus pandemic involved fraud.

The state paid at least $11.4 billion, which is approximately 10 percent of benefits paid during the pandemic, in funds that involved fraud, the California Employment Development Department confirmed to The Hill. Seventeen percent of the rest of total benefits paid are under investigation.

“There is no sugarcoating the reality,” California Labor Secretary Julie Su aid during a press conference Monday, the Los Angeles Times reported. “California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation."

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The state has paid $114 billion in unemployment benefits since the start of the pandemic last March, with officials processing approximately 19 million claims.

Officials warned that many of the 17 percent of claims under investigation could also involve fraud. 

Su on Monday said that the Trump administration did not provide adequate guidance and resources to California amid the pandemic, as swaths of businesses were forced to close under health orders. She said that almost all of the fraudulent claims were filed through a federal program that provides unemployment benefits to the self-employed, independent contractors and others.

“We now know that as millions of Californians applied for help, international and national criminal rings were at work behind the scenes working relentlessly to steal unemployment benefits using sophisticated methods of identity theft,” Su said, according to the Times. 

California’s Employment Development Department announced last month that it was freezing 1.4 million unemployment claims to verify identities.

The Department has hired a contractor to verify the identities of claimants, ID.me. The contractor has found that 35 percent of unemployment applications nationwide had fraud concerns.

The state is also grappling with a backlog of unemployment claims amid the pandemic, which totaled 916,000 claims as of last week. 

—Updated at 10:56 p.m.