ORLANDO, Fla. — The U.S. Department of Labor’s Office of Inspector General warned Wednesday that it believes states have paid out billions of CARES Act dollars in fraudulent unemployment claims.

What You Need To Know

  • Assistant Inspector General's memo says states potentially paid $5.4 billion in fraudulent claims with CARES Act money 

  • Office found social security numbers from more than 91,000 deceased persons were used

  • Florida has not released exact figures of fraudulent unemployment claims 

“We identified more than $5.4 billion of potentially fraudulent UI benefits paid to individuals with social security numbers filed in multiple states, to individuals with social security numbers used to file for UI claims with suspicious email accounts,” Carolyn Hantz, U.S. Department of Labor’s Assistant Inspector General, wrote in a letter released Wednesday.

The letter provides a broad warning about states nationally potentially paying upwards of billions of dollars in CARES Act funding to fraudulent claims between March 2020 and October 2020.

“The OIG expects the actual amount of potential fraud is much larger,” the letter states. “For example, in January 2021, California reported it paid at least 10 percent ($11 billion) of its UI benefits to fraudulent claims since the pandemic began and believes the amount could be as high as 27 percent ($29 billion). Other states have also reported instances of major fraud including New York ($1 billion), Washington ($600 million) and Maryland ($501 million).”

Florida Department of Economic Opportunity has not answered Spectrum News’ repeated direct questions in recent weeks about how much it may have paid out in fraudulent claims.

“The Department takes Reemployment Assistance fraud seriously,” the agency told Spectrum News in a statement. “The Department continues to mitigate fraudulent activity and protect the identity of Floridians. The Department continues to investigate cases of Reemployment Assistance fraud, and reviews locked claims on a case-by-case basis.”

DEO said in a statement that it sends weekly identity verification emails to claimants with locked claims, sent from DoNotReplyReemploymentAssistance@deo.myflorida.com

What remains to be answered are specific figures about fraud in Florida.

Florida Rep. Anna Eskamani, D-Orlando, said she and other lawmakers have been trying to get answers from DEO without a specific response.

Spectrum News has asked DEO how much it believes it may have paid out so far in fraudulent claims, how much it has recovered, and how much the agency believes it may have blocked or prevented from being paid out to fraudulent claims.

While the IRS and other agencies have long warned of potential scams, Spectrum News started digging into the issue several weeks ago amid growing reports of fraud.

A spokesperson for a city in Brevard County told Spectrum News at least 11 city workers have received notices of applications and/or actual unemployment checks in the mail from DEO, despite none of the workers ever applying for unemployment.

Florida Department of Economic Opportunity’s dashboard says it has paid out more than $22 billion in state and federal unemployment funds since March 2020.

In reviewing potential fraud, the U.S. Department of Labor’s Office of Inspector General found nationally the social security numbers of more than 91,000 deceased persons were used to submit fraudulent claims, allowing scammers to collect and estimated $58.7 million.

The IG's office also found scammers used more than 13,000 social security numbers of incarcerated federal prisoners to file fraudulent claims, receiving more than $98 million.

The Department of Labor is warning states to take immediate action.

While FL DEO says it is taking safeguards to block payments to fraudulent claims, it is also facing a logjam of thousands of claimants still waiting months to be paid.

Frustrated Floridians continue to reach out to Spectrum News, illustrating a series of problems causing claims to stall, and frustration with the inability to connect with DEO to clear up issues.

The agency’s unemployment system has long been criticized for failing to work effectively or efficiently.

In Summer 2020, Gov. Ron DeSantis ordered the state’s inspector general to review the system from top to bottom. As of February 2021, the review is incomplete.

“The report has not yet been released, but hope to have an update soon,” Meredith Beatrice, spokesperson for DeSantis told Spectrum News.

With the 2021 Legislative Session scheduled to begin March 2, there are efforts to pressure lawmakers to address the system failures once and for all.