LANSING, Mich. – The state of Michigan said Friday it has resumed unemployment benefits for 140,000 people whose accounts were frozen during an investigation of potentially fraudulent claims filed by impostors.
The payments are being made “within days" of identities being validated, according to the announcement that came a week after the state said payments had been halted to 340,000 accounts — 20% of all those being paid — during the coronavirus pandemic. Criminals have applied used previously stolen or false personal information from data breaches at Equifax and others.
“It's extremely upsetting that the actions of these fraudsters have delayed payments meant for our working families,” Steve Gray, director of the Unemployment Insurance Agency, said in a statement. “While we continue to work with our state and federal partners to stop this unlawful activity, our focus remains on doing everything we can to quickly validate authentic claims and get our workers the emergency financial assistance they need."
It was not clear how long it will take to verify the 200,000 remaining accounts, which account for 61% of the active accounts that were sent stop payment notices. Spokesman Jason Moon said it would take months under normal circumstances, “but we will not let that happen here.” Six hundred staff are working to confirm identities with 200 more in training.
The state is bringing on a forensic accounting firm and experts to help weed out fraud and clear legitimate claims.
The agency said people made more than 50,000 reports of unemployment fraud and identity theft since March 15. More than 40,000 of them came since May 1.
People who receive what is known as a monetary determination letter without having applied for jobless benefits or whose name does not match what is on the form may be a victim of identity theft. They should contact the agency immediately.
Michigan has seen 2.2 million new jobless claims since COVID-19 officially arrived in March and businesses were closed to curb the spread. While more than 1.7 million people have been paid in a state that had the second-highest unemployment rate in April, 22.7%, Gov. Gretchen Whitmer’s administration faced criticism for delays in processing claims before the criminal schemes came to light.
The U.S. Labor Department has estimated that at least $26 billion in benefits could be wasted nationally, with the bulk of that going to fraudsters.
The federal government said this week 21.5 million people are receiving jobless aid, creating added opportunity for criminals. An extra $600 a week in benefits provided as part of a U.S. coronavirus rescue law makes it more lucrative.
“Unfortunately, this unprecedented public health crisis has created an opportunity ripe for abuse by people who are exploiting the system and hampering the ability to get legitimate claims paid,” said state Attorney General Dana Nessel, who formed a task force to investigate and crack down on fraud.