The governor said none of the fraudulent claims in Maryland received payments, but the benefits of a small number of legitimate claimants in need were frozen during the investigation.
Hogan said those people’s benefits will be reinstated, but he could not estimate how many Marylanders were affected.
Hogan told reporters at a news conference that the onslaught of fake claims appeared to use identities constructed from a huge cache of information taken in national data breaches in recent years. As examples, he cited breaches at the Experian credit rating agency and the federal Office of Personnel Management. Personal data in Maryland’s unemployment system was not breached as part of the scam.
The fake claimants posed as out-of-state companies seeking federal benefits of up to $600 per week under a process that allows claimants to self-certify job loss, rather than to have unemployment verified by the employer.
The process was created to quickly funnel benefits to small businesses and others who wouldn’t normally qualify for relief.
“Fraudsters are capitalizing on the hardships created by the pandemic,” Maryland Labor Secretary Tiffany Robinson said at the news conference.
Hogan said Wednesday that much of the backlog has been cleared and that the state has processed 96.4 percent of the more than a half-million claims it received.
The FBI warned last week that it had detected a “spike” in scammers using stolen identities to claim unemployment benefits, saying the scheme had been perpetrated in several states.
“Many victims of identity theft related to unemployment insurance claims do not know they have been targeted until they try to file a claim for unemployment insurance benefits,” the agency said in a statement July 6.
Officials in New Jersey, New York, Arizona and Pennsylvania have reported unemployment fraud in recent days, but it was not immediately clear whether those cases were connected.
Special Agent Derek Pickle, with the Office of Inspector General at the U.S. Department of Labor, said at the Hogan news conference that unemployment fraud has been reported in all 50 states.
In normal times, he said, his office dedicates 10 percent of its staff to detecting such fraud. But more than 50 percent of the office is working on the issue during the pandemic, he said.
Pickle left the news conference without taking questions.
The Hogan administration released a statement by Robert K. Hur, the U.S. attorney for the District of Maryland, saying his office will investigate and prosecute the matter.
The crush of unemployment claims during the pandemic created long delays across the country in securing jobless benefits.