State Defends Actions In Loss Of Billions Of Dollars In Pandemic Unemployment Relief
PITTSBURGH (KDKA) -- The state concedes $6 billion was stolen by identity and cyber thieves from the unemployment compensation system during the pandemic.
The state -- which initially disputed KDKA-TV's reports of billions of dollars stolen -- now confirms this massive theft. But the secretary of the Pennsylvania Department of Labor and Industry said it's not entirely her department's fault and puts most of the blame at the feet of the federal government.
When the pandemic hit, the federal government made close to a trillion dollars available in Pandemic Unemployment Assistance for states to distribute to unemployed workers. Seeing an unprecedented honey pot, identity and cyber thieves pounced on systems.
"When the program rolled out, it had virtually no restrictions, and it was extremely rife with fraud," said Jennifer Berrier, the secretary of the Pennsylvania Department of Labor and Industry.
The state now concedes the thieves -- primarily from overseas -- have stolen $6 billion in PUA and regular state unemployment payments. But the lion's share has been the federal PUA payments, and Berrier said the state was saddled with loose federal guidelines that opened the door to fraudsters.
"In fact, I would say it would probably be harder to get a Costco card than to apply for PUA," she said.
And Pennsylvania is by no means alone. Cyber thieves have hit every state unemployment system in the country. Estimates are now approaching $200 billion in fraud nationwide. The U.S. Secret Service said international thieves used "bots" to file claim after claim -- 1.2 million false claims in Pennsylvania alone.
Agent Roy Dotson, the National Pandemic Fraud coordinator, said no state system was prepared.
Dotson: I don't think any of us could have seen the scope of this fraud.
Sheehan: Do you believe it is the largest fraud in history?
Dotson: I do.
Pennsylvania has now slowed the fraud by hiring the security firm ID.me, which uses facial recognition software to verify claims. But those efforts unintentionally created a backlog of unresolved claims, which still stand at more than 100,000.
"We're balancing paying benefits as quickly as possible while protecting the integrity of the system and not handing out money to fraudsters, and it's been very challenging during this pandemic," Berrier said.
Yet, she sees light at the end of the tunnel.
"Our goal at the end of the day is to make sure that all eligible UC claimants receive the benefits that they deserve," she said.
