Records show Illinois Department of Employment Security lost $1.2 million in taxpayer money to fraudsters

CHICAGO (CBS) — The State of Illinois despatched greater than $1.2 million in unemployment advantages to fraudsters’ accounts, whereas many who had been unemployed waited months — and typically longer — for cash they had been owed.

For the primary time, the Illinois Division of Employment Safety (IDES) was pressured to show over information to CBS 2 that make clear the scope of unemployment fraud, which the company has failed to stop because the begin of the pandemic.

In March, CBS 2 first uncovered a number of situations the place claimants’ financial institution  accounts had been hacked and their advantages despatched to fraudsters’ accounts. Sharon Thomas was a type of victims. A complete of $5,472 in unemployment profit {dollars} had been redirected from her account to the scammer’s.

Thomas instantly informed IDES the cash was going to the unsuitable account. However she mentioned the state continued to deposit her unemployment advantages into that account anyway. 

She additionally struggled to get any assist from IDES in any respect at first – an expertise echoed by many who had been laid off through the pandemic. She mentioned over the course of many months she labored laborious to do what the representatives requested to verify her id.

“I’ve despatched them my Social Safety card and my driver’s license at the very least six or seven occasions in numerous departments,” Thomas, who lives in Midlothian, mentioned in March. “And if you cellphone there, you possibly can’t get the identical individual twice – you are put right into a name system that, at any time when any individual’s free, they name you subsequent. And I simply saved ready and hoping.”

Thomas finally crammed out and despatched a number of cost tracers for the weeks she was owed unemployment. Tracers are important varieties meant to assist IDES examine when unemployment cash was by no means acquired by the claimant. The method requires filling out the whole greenback quantity somebody believes they had been owed for the time durations wherein they didn’t obtain their advantages.

Thomas believed IDES stopped the fraud when she first reported it final Might. 4 months later, after chatting with company representatives, she thought her subject had been resolved. Ultimately, she received a name again from one other consultant. As an alternative of getting the cash she was owed again, she was informed that test was launched – however to not her.

“And I simply was in tears,” Thomas mentioned. “I am like, how might this occur?”

Thomas mentioned she mailed in her tracer varieties in October of 2021. By December, an IDES consultant informed her the company could not discover them. She needed to resubmit and was informed to test again in 45 days. Greater than two months later, she was nonetheless ready for an final result.

“[The IDES employee] discovered they’d simply been sitting idle, and so they did not transfer ahead to the subsequent step like they need to’ve been,” Thomas mentioned.

The company has traditionally refused to publicly disclose the scope of pandemic-related unemployment fraud. To know how typically unemployment advantages are intercepted by scammers, CBS 2 filed a Freedom of Data Act (FOIA) with IDES in December of 2021. The request requested for data that might present what number of complete cost tracers had been filed and the way a lot cash was misplaced from March 1, 2021 via Nov. 30, 2021 – a timeframe wherein IDES sources mentioned they started to see fraud numbers spike.

On the time, the IDES spokesperson and a FOIA officer repeatedly claimed the company didn’t observe the information and refused to offer redacted copies of the tracer varieties, saying it might be burdensome to take action. 

“So at any time when public officers disguise info like this, we ought to be asking ourselves, why are they hiding this?” lawyer and FOIA skilled Matt Matter beforehand mentioned in an interview. “Why will not they simply flip this over? What have they got to cover?”

On January 10, CBS 2 filed an attraction with the Illinois Legal professional Common’s Workplace, asking the company to overview IDES’ response for potential FOIA violations. That course of revealed what IDES initially informed CBS 2 wasn’t true: the company truly does observe how a lot it has paid again claimants as a consequence of fraud. 

Because of this, on March 31 IDES was pressured to ship the information to CBS 2. It incorporates info on greater than 1,000 tracers that had been filed by claimants from January 2021 via March of this 12 months. That is greater than 1,000 occasions IDES paid individuals again, after they reported they by no means acquired their advantages.

The info is revealing, and for the primary time reveals how IDES has failed to stop an in depth quantity of unemployment fraud. In simply over a 12 months alone, company paid again claimants greater than $1.2 million that was initially despatched to fraudsters.

The full quantity misplaced and paid again to claimants through the pandemic is probably going a lot larger. An IDES spokesperson mentioned the company is at present investigating greater than 400 extra cost tracers filed by claimants who didn’t obtain their advantages. 

Thomas is likely one of the claimants nonetheless ready for a decision. In a latest interview with CBS 2 — a full 12 months since her advantages had been stolen — she has contacted IDES a number of occasions. Whereas she has not acquired her cash, she mentioned an IDES consultant informed her she might be paid within the subsequent few months. 

“I simply need it to be over,” Thomas mentioned. “I need what I am owed. And I need to be carried out with it.”  

She’s not alone. Shonda Perkins is ready on greater than $800 after she mentioned her unemployment advantages had been intercepted by a fraudster. Regardless of filling out a number of tracers, she nonetheless hasn’t acquired assist — or her cash — from IDES. 

“It is simply not truthful to us – the individuals ready on cash, as a result of we actually want that cash,” Perkins mentioned. “I hope going ahead there is a manner they will enhance the system so this by no means occurs to individuals once more.”  

The IDES spokesperson didn’t reply CBS 2’s questions particularly asking how the company failed to stop a lot cash from ending up within the unsuitable palms.

The company supplied the next assertion to CBS 2:

“Cost tracers are particular person paper paperwork. Whereas there is no such thing as a requirement {that a} spreadsheet of all cost tracers is maintained, an IDES worker did, in actual fact, create and preserve a spreadsheet of the tracers with out it being required. As quickly as the person realized that the spreadsheet might be related to reply to a FOIA request, they reached out to the FOIA Workplace with the spreadsheet, and it was supplied to you inside days. 

“All states throughout the nation have handled a surge of dangerous actors inside state unemployment insurance coverage methods. In Illinois, IDES has carried out new instruments and continued outreach campaigns to assist present claimants defend their unemployment insurance coverage accounts. In September 2021, IDES carried out ILogin, a cutting-edge id verification instrument that leverages multi-factor authentication to safe claimants’ accounts. This instrument is one in every of many instruments in our arsenal – together with public info sharing, collaboration with federal companions, and extra revolutionary expertise – that helps claimants preserve their accounts safe. It is very important observe that the dates included within the related spreadsheet are cost reissue dates. That’s, they correspond to when the claimant acquired their re-issued cost, not the date when the unique cost was misdirected. There exists a window between the unique missed cost, when the claimant completes their affidavit of non-receipt, and when the Division points and investigates the declare. We’re assured that the success of ILogin multi-factor authentication and different instruments has considerably curbed this kind of fraud. And, whereas fraudsters focused all features of the unemployment system, information in Illinois and states nationwide level to the overwhelming majority of complete fraud occurring within the PUA program as a result of lack of federal integrity measures in place.

“Claimants can study extra about methods to defend their unemployment insurance coverage account at ides.illinois.gov/fraud. Extra details about ILogin can be out there at ides.illinois.gov/ilogin.”

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