Records show 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 to fraudsters’ accounts, while many who were unemployed waited months — and sometimes longer — for money they were owed.

For the first time, the Illinois Department of Employment Security (IDES) was forced to turn over data to CBS 2 that shed light on the scope of unemployment fraud, which the agency has failed to prevent since the start of the pandemic.

In March, CBS 2 first uncovered multiple instances where claimants’ bank  accounts were hacked and their benefits sent to fraudsters’ accounts. Sharon Thomas was one of those victims. A total of $5,472 in unemployment benefit dollars were redirected from her account to the scammer’s.

Thomas immediately told IDES the money was going to the wrong account. But she said the state continued to deposit her unemployment benefits into that account anyway. 

She also struggled to get any help from IDES at all at first – an experience echoed by many who were laid off during the pandemic. She said over the course of many months she worked hard to do what the representatives asked to confirm her identity.

“I have sent them my Social Security card and my driver’s license at least six or seven times in various departments,” Thomas, who lives in Midlothian, said in March. “And when you phone there, you can’t get the same person twice – you’re put into a call system that, whenever somebody’s free, they call you next. And I just kept waiting and hoping.”

Thomas eventually filled out and sent multiple payment tracers for the weeks she was owed unemployment. Tracers are critical forms meant to help IDES investigate when unemployment money was never received by the claimant. The process requires filling out the total dollar amount someone believes they were owed for the time periods in which they did not receive their benefits.

Thomas believed IDES stopped the fraud when she first reported it last May. Four months later, after speaking to agency representatives, she thought her issue had been resolved. Eventually, she got a call back from another representative. Instead of getting the money she was owed back, she was told that check was released – but not to her.

“And I just was in tears,” Thomas said. “I’m like, how could this happen?”

Thomas said she mailed in her tracer forms in October of 2021. By December, an IDES representative told her the agency couldn’t find them. She had to resubmit and was told to check back in 45 days. More than two months later, she was still waiting for an outcome.

“[The IDES employee] found they’d just been sitting idle, and they didn’t move forward to the next step like they should’ve been,” Thomas said.

The agency has historically refused to publicly disclose the scope 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 of 2021. The request asked for records that could show how many total payment tracers were filed and how much money was lost from March 1, 2021 through Nov. 30, 2021 – a timeframe in which IDES sources said they began to see fraud numbers spike.

At the time, the IDES spokesperson and a FOIA officer repeatedly claimed the agency did not track the data and refused to provide redacted copies of the tracer forms, saying it would be burdensome to do so. 

“So whenever public officials hide information like this, we should be asking ourselves, why are they hiding this?” attorney and FOIA expert Matt Topic previously said in an interview. “Why won’t they just turn this over? What do they have to hide?”

On January 10, CBS 2 filed an appeal with the Illinois Attorney General’s Office, asking the agency to review IDES’ response for potential FOIA violations. That process revealed what IDES originally told CBS 2 wasn’t true: the agency actually does track how much it has paid back 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 claimants from January 2021 through March of this year. That’s more than 1,000 times IDES paid people back, after they reported they never received their benefits.

The data is revealing, and for the first time shows how IDES has failed to prevent an extensive amount of unemployment fraud. In just over a year alone, agency paid back claimants more than $1.2 million that was originally sent to fraudsters.

The total amount lost and paid back to claimants during the pandemic is likely much higher. An IDES spokesperson said the agency is currently investigating more than 400 additional payment tracers filed by claimants who did not receive their benefits. 

Thomas is one of the claimants still waiting for a resolution. In a recent interview with CBS 2 — a full year since her benefits were stolen — she has contacted IDES multiple times. While 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 be done with it.”  

She’s not alone. Shonda Perkins is waiting on more than $800 after she said her unemployment benefits were intercepted by a fraudster. Despite filling out multiple tracers, she still hasn’t received help — or her money — from IDES. 

“It’s just not fair to us – the people waiting on money, because we really need that money,” Perkins said. “I hope going forward there’s a way they can improve the system so this never happens to people again.”  

The IDES spokesperson did not answer CBS 2’s questions specifically asking how the agency failed to prevent so much money from ending up in the wrong hands.

The agency provided the following statement to CBS 2:

“Payment tracers are individual paper documents. While there is no requirement that a spreadsheet of all payment tracers is maintained, an IDES employee did, in fact, create and maintain a spreadsheet of the tracers without it being required. As soon as the individual realized that the spreadsheet could be relevant to respond to a FOIA request, they reached out to the FOIA Office with the spreadsheet, and it was provided to you within days. 

“All states across the country have dealt with a surge of bad actors within state unemployment insurance systems. In Illinois, IDES has implemented new tools and continued outreach campaigns to help existing claimants protect their unemployment insurance accounts. In September 2021, IDES implemented ILogin, a cutting-edge identity verification tool that leverages multi-factor authentication to secure claimants’ 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 claimants keep their accounts secure. It is important to note that the dates included in the relevant spreadsheet are payment reissue dates. That is, they correspond to when the claimant received their re-issued payment, not the date when the original payment was misdirected. There exists a window between the original missed payment, when the claimant completes their affidavit of non-receipt, and when the Department issues and investigates the claim. We are confident that the success of ILogin multi-factor authentication and other tools has substantially curbed this sort of fraud. And, while fraudsters targeted all aspects of the unemployment system, data in Illinois and states nationwide point to the overwhelming majority of total fraud occurring in the PUA program due to the lack of federal integrity measures 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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Source : https://www.cbsnews.com/chicago/news/records-show-illinois-department-of-employment-security-lost-millions-taxpayer-money-fraudsters/

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