Records show the Illinois Department of Employment Security lost $1.2 million in taxpayer money to fraudsters
CHICAGO (CBS) — The state of Illinois sent more than $1.2 million in unemployment benefits towhile many of those who were unemployed waited months – and sometimes longer – for the money owed to them.
For the first time, the Illinois Department of Employment Security (IDES) has been forced to hand over data to CBS 2 that sheds light on the extent of unemployment fraud, which the agency does not has failed to prevent since the start of the pandemic.
In March,several cases where claimants’ bank accounts were hacked and their benefits sent to the fraudsters’ accounts. Sharon Thomas was one such victim. A total of $5,472 in unemployment benefit dollars was redirected from his account to the scammer’s.
Thomas immediately told IDES that the money was going to the wrong account. But she said the state still continued to deposit its unemployment benefits into that account.
She also struggled to get help from IDES at first – an experience echoed by many who were made redundant during the pandemic. She said that over the course of several months she worked hard to do what the representatives asked her to confirm her identity.
“I sent them my social security card and driving license at least six or seven times in different counties,” Thomas, who lives in Midlothian, said in March. “And when you phone there you can’t have the same person twice – you’re put into a call system which whenever someone’s free they then call you. And I just keep waiting and hoping.”
Thomas eventually completed and sent several payment tracers for the weeks of unemployment owed to him. Tracers are essential forms to help IDES investigate when unemployment money was never received by the claimant. The process requires filling in the total dollar amount someone thinks they owed for the periods in which they did not receive their benefits.
Thomas thought IDES had shut down the fraud when it first reported it last May. Four months later, after speaking to agency representatives, she believed her problem had been resolved. Finally, she received a call from another representative. Instead of collecting the money owed to her, she was told the check had been released – but not to her.
“And I was just in tears,” Thomas said. “I think to myself, how could this have happened?”
Thomas said she mailed her tracking forms in October 2021. In December, an IDES representative told her the agency couldn’t find them. She had to resubmit and was told to come back in 45 days. More than two months later, she was still waiting for a result.
“[The IDES employee] found out they just sat idle and didn’t take the next step like they should have,” Thomas said.
The agency has consistently refused to publicly disclose the extent of pandemic-related unemployment fraud. To understand how often unemployment benefits are intercepted by scammers, CBS 2 filed a Freedom of Information Act (FOIA) with IDES in December 2021. The request asked for records that could show how many tracers total payments have been deposited and how much money has been lost. from March 1, 2021 to November 30, 2021 – a period in which IDES sources said they began to see the number of frauds increase.
At the time, the IDES spokesperson and a FOIA agent repeatedly claimed that the agency had not tracked the data and refused to provide redacted copies of the tracking forms, claiming that it would be tedious to do so.
“So whenever officials hide information like this, we should ask ourselves why are they hiding this?” attorney and FOIA expert Matt Topic has already said in an interview. “Why don’t they just turn it over? What have they got to hide?”
On January 10, CBS 2 filed a complaint with the Illinois Attorney General’s office, asking the agency to review IDES’ response for possible FOIA violations. This process revealed that what IDES originally told CBS 2 was not true: the agency is actually tracking how much it has reimbursed claimants due to fraud.
As a result, on March 31, IDES was forced to send the data to CBS 2. It contains information on more than 1,000 tracers that were filed by plaintiffs from January 2021 to March this year. That’s more than 1,000 times that IDES has reimbursed people, after they reported they never received their benefits.
The data is eye-opening and shows for the first time how IDES has failed to prevent a large amount of unemployment fraud. In just over a year, the agency has refunded claimants more than $1.2 million originally sent to fraudsters.
The total amount lost and reimbursed to claimants during the pandemic is likely much higher. A spokesperson for IDES said the agency is currently investigating more than 400 additional payment tracers filed by claimants who have not received their benefits.
Thomas is one of the claimants still awaiting resolution. In a recent interview with CBS 2 – a year since her benefits were stolen – she contacted IDES several times. Although she has not received her money, she said an IDES representative told her she could be paid in the next few months.
“I just want it to be over,” Thomas said. “I want what I’m owed. And I want to get this over with.”
She is not alone. Shonda Perkins is expecting more than $800 after saying her unemployment benefits were intercepted by a fraudster. Although she has completed several tracers, she still has not received any help – or her money – from IDES.
“It’s just not fair to us – people who are waiting for money, because we really need that money,” Perkins said. “Hopefully in the future they can improve the system so that this never happens to people again.”
The IDES spokesperson did not respond to questions from CBS 2 specifically asking how the agency failed to keep so much money from ending up in the wrong hands.
The agency provided the following statement to CBS 2:
“Payment trackers are individual paper records. While there is no requirement that a spreadsheet of all payment trackers be maintained, an IDES employee has, in fact, created and maintained a tracers’ spreadsheet without it being necessary.As soon as the individual realized that the spreadsheet might be relevant in responding to a FOIA request, they contacted the FOIA office with the spreadsheet, and that -it was delivered to you in a few days.
“States across the country have faced a surge of malicious actors within state unemployment insurance systems. In Illinois, IDES implemented new tools and continued awareness campaigns to help existing claimants to protect their unemployment insurance accounts. In September 2021, IDES implemented ILogin, an industry-leading identity verification tool that leverages multi-factor authentication to secure claimant accounts. This tool is one of many tools in our arsenal – along with public information sharing, collaboration with federal partners, and additional innovative technology – that helps applicants keep Important to note that the dates included in the spreadsheet relevant are dates of reissue of the payment, i.e. they correspond to the date on which the applicant received their reissued payment, and not the date on which the initial payment been misdirected. a window between the original missed payment, when the claimant completes their Affidavit of Non-Receipt, and w Then the Department issues and investigates the claim. We believe that the success of ILogin multi-factor authentication and other tools has significantly curbed this type of fraud. And, while fraudsters targeted all aspects of the unemployment system, data from Illinois and states across the country indicate that the overwhelming majority of total fraud occurring in the PUA program due to lack of integrity measures federal authorities in place.
“Claimants can learn more about how to protect their Unemployment Insurance account at ides.illinois.gov/fraud. More information about ILogin is also available at ides.illinois.gov/ilogin.”
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