Gov. J.B. Pritzker announced Wednesday that Illinois officials have found more than 120,000 cases of unemployment fraud since March connected to a national identity theft scheme during the coronavirus pandemic.
Pritzker said in a news conference that residents who received an unemployment debit card or letter from the state in the mail, but did not apply for unemployment assistance, are likely victims of the fraud. The state recommends they report identity theft to the Illinois Department of Employment Security at www.illinois.gov/ides or by calling 800-814-0513, Pritzker said.
IDES found 107,000 fraud cases in the federal Pandemic Unemployment Assistance program set up in May, and about 14,000 in the state system, Pritzker said.
The governor laid blame on flaws in the federal program and said states across the country are facing similar cases of fraud.
Pritzker said the federal system resulted in “massive holes for illegal fraudsters to steal federal funds.”
A “poorly designed” national program allowed “highly experienced money launderers” to take advantage of “massive holes” to file more than 120,000 fraudulent claims through Illinois’ beleaguered unemployment benefits system during the coronavirus pandemic. […]
In the scheme, fraudsters have used Illinois residents’ personal information stolen in separate data breaches to apply for benefits to be paid through direct-deposit, debit cards and other financial tools employed by legitimate filers.
“The highly experienced money launderers who have perpetrated these crimes use the same payment methods that regular filers do,” Pritzker said, so the state can’t cut off “common dispersal mechanisms” that are also used by people who really need the help.
Accompanying Pritzker to yesterday’s press conference was Marco Morales, the IDES benefit payment control manager. Chicago reporters did not ask him a single question. Instead, several focused on COVID-19 topics that were covered way back in March and April. It was a weird thing.
* Anyway, back to unemployment…
The number of Americans seeking jobless benefits fell last week, but a staggering 31.3 million people were receiving unemployment checks in mid-July, suggesting the labor market was stalling as the country battles a resurgence in new COVID-19 cases that is threatening a budding economic recovery.
Other data on Thursday showed a 54% surge in job cuts announced by employers in July. The reports followed on the heels of news this week of a sharp step-down in private payrolls in July and continued declines in employment at manufacturing and services industries.
“Repeated shutdowns for virus containment remain a threat to the labor market, which is already weak,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York. “Without effective virus containment the recovery remains at risk from ongoing job losses that could further restrain incomes and spending.”
Initial claims for state unemployment benefits fell 249,000 to a seasonally adjusted 1.186 million for the week ended Aug. 1, the Labor Department said. That was the lowest since mid-March. Claims remain well above the peak of 695,000 during the 2007-2009 Great Recession.
According to the US Department of Labor, 24,712 Illinoisans filed for new unemployment claims last week, down 8,518 from the previous week. Another 4,515 filed for pandemic unemployment assistance, down 1,943 from the previous week.
This is the 20th straight week that more than a million people have filed for new unemployment assistance.