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Firings linked to D.C. unemployment fraud probe

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Two workers in the District’s employment services agency, including a high-ranking supervisor, have been fired in connection with an ongoing investigation into suspected unemployment insurance fraud.

Gaby L. Fraser, 55, was taken off the job Sept. 1 and dismissed Tuesday. Another employee was let go Thursday, the city said in a news release. The worker’s name and position were not immediately provided.

No charges have been filed against Fraser, but Mayor Vincent C. Gray (D) and aides confirmed Wednesday that Fraser’s termination was related to the probe being conducted by the Office of the Inspector General.

“This was done with speed, let me put it that way,” Gray said. “There was enough there to have someone removed from the job.”

Gray said the allegations surrounded “people getting on unemployment that shouldn’t have been there.” Other administration officials say the probe is looking into whether Fraser improperly placed family members or associates on the unemployment compensation rolls. Sources familiar with the investigation who cannot speak publicly about an ongoing probe said the city had sent checks to multiple people listed at Fraser’s address.

Reached Wednesday, Fraser declined to address the allegations. “Right now, I can’t say anything because I don’t know anything,” she said. “I’m just in the dark as much as you are.”

Employment Services Director Lisa M. Mallory said the investigation was prompted after a claims-monitoring system “detected an abnormality.”

“I took very speedy action after that,” said Mallory, who declined to discuss the amount of money in question.

Federal and local investigators have taken an interest in the compensation program in recent years, as the volume of claims has soared alongside the District’s unemployment rate. In fiscal 2007, with the city jobless rate under 6 percent, 17,645 residents made initial claims for unemployment checks. Two years later, unemployment had risen to about 10 percent and more than 52,000 sought checks for the first time.

In a July 19 letter to Gray, Inspector General Charles J. Willoughby said his office was conducting an “ongoing special evaluation” of the unemployment compensation office and that he expected to submit a report later in the year.

The letter accompanied a management alert that found “essential safeguards” in an agency computer system were “inappropriately turned off” from February 2009 to July 2010, allowing an unknown number of checks to be mailed to ineligible recipients. According to the letter, a city contractor told investigators that a former agency manager had ordered the safeguards to be disabled, perhaps to allow officials to more easily handle a record number of claims.

That alert followed years of ongoing scrutiny. In early 2009, the U.S. Department of Labor “detailed several long-standing and serious concerns” about the unemployment insurance department in a briefing given to Joseph P. Walsh, the Employment Services director at the time. In December 2010, Walsh told Willoughby his department had installed a new fraud-detection system, among other improvements.

Since then, the office has stepped up its efforts in prosecuting fraud cases. In the past year, the office has successfully prosecuted 10 cases involving more than $100,000. One of the cases involved an agency worker.

A city employee since 1997, Fraser served as an unemployment compensation claims officer making more than $97,000 a year, according to city records published in March. Department spokesman David Thompson said Fraser was appointed an interim assistant director in charge of the unemployment insurance office this summer.

Fraser is well known in Ward 8 political circles for her work as a campaign organizer. She served as an executive committee member for the Ward 8 Democrats until recently, and has been a paid consultant for numerous campaigns, including former mayor Anthony A. Williams’s 2002 reelection bid.

Gray spokeswoman Linda Wharton Boyd said Fraser had “no formal role that I know of” in Gray’s 2010 mayoral campaign.

Staff writer Nikita Stewart contributed to this report.

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