D.C. school transit workers among top group suspended in job scam, officials say

District employees who work in school transportation are among the largest group of city workers suspended Monday because of an alleged scheme to collect unemployment benefits while still holding their jobs.

Of the 90 employees suspended on Monday, 36 worked within the transportation division of the Office of the State Superintendent of Education, said spokesman Brandon Frazier.

On Wednesday, Attorney General Irvin B. Nathan said he thought school bus drivers or non-teachers within D.C. public schools to be among the top 10 offenders in the alleged scam.

Nathan’s office and other city officials later clarified that the employees were in the transportation division of OSSE. Nathan described a major offender as a worker who fraudulently collected unemployment benefits for more than a year.

The employees were suspended for receiving jobless benefits, and 40 former employees were also implicated. City officials estimate that $800,000 in payments were doled out to working city employees since 2009.

“The most egregious cases will be referred to prosecutors,” Nathan said at the mayor’s biweekly news conference Wednesday.

Nathan said workers who received payments signed documents claiming that they were unemployed, which would put them in violation of the city’s False Claims Act. “In every case, we will try to get the money back,” he said.

Lisa Mallory, director of the D.C. Department of Employment Services, said some employees have been terminated since Monday but did not know specifically how many. She said most employees were placed on administrative leave between 15 to 30 days, depending on their contracts.

Nathan said the city did not want to risk lawsuits from workers who could claim that the city did not follow policy in their terminations. Each employee has been given the opportunity to “explain in writing what happened,” he said.

“We are going to give them due process,” he said.

City officials declined to release a list of names, citing the ongoing investigations.

Meanwhile, questions persisted about why the city was unable to determine that its workers were receiving unemployment checks for three years.

Scott Malm, a Deloitte consultant who advises state unemployment bureaus, said he’s not previously heard of such a large group of government employees being caught receiving illicit jobless checks.

“Overpayments” to unemployment insurance recipients who are actually employed is a problem across the country, Malm said. But most states, he added, cross-check their unemployment rolls against local and national databases of new hires as well as against their own payrolls and hiring data submitted by private employers.

Mayor Vincent C. Gray (D) attributed the alleged fraud to poor supervision of the benefits program in the past. “The controls were insufficient,” he said.

Mallory said Monday the District had started using a federal new-hire database to validate its unemployment rolls in the past year, following a U.S. Department of Labor grant.

Mike DeBonis covers Congress and national politics for The Washington Post. He previously covered D.C. politics and government from 2007 to 2015.

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