Maryland labor officials said Monday that they have found 508,000 “potentially fraudulent” unemployment claims in the past six weeks, the latest response from the Hogan administration as it fends off criticism over the governor’s decision to cut enhanced federal jobless benefits in coming days.
“As the economy recovers and states across the country continue to opt out of the federal benefits program, bad actors are becoming more brazen and aggressive in their attempts to exploit unemployment insurance programs than ever before,” Labor Secretary Tiffany P. Robinson said in a statement.
It was not clear how many of the “potentially fraudulent” new claims have been verified as fake or whether any will result in prosecution.
“We do not have that information,” said Labor Department spokeswoman Fallon E. Pearre. She said the agency has reported the claims to federal law enforcement, which would be responsible for investigating and pursuing legal action.
Hogan has drawn backlash from union leaders, unemployed workers and numerous Democratic elected officials over his decision to end the benefits two months before President Biden and Congress intended. Gig workers will lose unemployment benefits entirely, and traditional jobless applicants will lose an additional $300 a week in benefits.
State lawmakers said they worry about the impact on the hundreds of thousands of workers who have not been able to return to their pre-pandemic jobs.
Robinson recently told a legislative panel that the department hired a new vendor, Lexis-Nexis, to flag potentially fraudulent claims. In its first few weeks, the company said 64 percent of about 200,000 claims probably were fraudulent.
“Fraud is rampant, so we have to stay on top of it,” Robinson told the House Economic Matters Committee during a discussion about the end of the federal benefits.
Del. C.T. Wilson (D-Charles) asked Robinson what type of fraud was identified — whether it was from people who were working and collecting benefits, or from identity theft. She said the vast majority involve stolen identities, many purchased off the dark web. “We know there are foreign actors across the country and across the world that are using the identities that they have obtained,” she said.
Wilson said it was troublesome that the administration was mentioning fraudulent claims as it also defends the end of the federal money.
“My issue is when you say ‘fraud,’ and people hear ‘fraud,’ they don’t hear identity theft, they hear the ‘welfare queen’ of the ’80s, people who can work but don’t want to work,” he said.
Maryland’s unemployment system has been plagued with problems since the start of the pandemic, with many unemployed workers reporting delayed payments or wrongly rejected claims. Some workers say the system has rejected information they’ve provided to verify their identities, leaving them unable to submit claims and in limbo on collecting benefits.