ADOL investigates 340,000 unemployment claims for potential fraud

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MONTGOMERY, Alabama (WSFA) – Millions of dollars earmarked for helping those struggling to find work during the pandemic have gone to criminals. Federal stimulus checks and weekly unemployment benefits have proven too tempting for a number of thieves trying to get checks with stolen identities.

Tara Hutchison, of the Alabama Department of Labor, said that alongside law enforcement, the department is investigating 340,000 potentially fraudulent unemployment assistance claims related to the pandemic.

“Fraud is always going to happen. There has always been fraud in the unemployment benefit system and programs, but never, never at this point, ”Hutchison said.

ADOL, however, estimated that 43% or nearly half of those 340,000 fraudulent claims were reported by the department as fraud and not a single dollar was sent. In other words, approximately 146,000 of the claims were blocked by ADOL.

“It was inevitable. It was almost impossible to stop all of this fraud from happening, but we were able to prevent almost half of this fraud from happening, ”Hutchison said.

ADOL faced the same problem as every other state in the country during the pandemic – a tsunami of jobless claims.

“We have never paid as much money as we paid during the pandemic. Never had so many claims filed, ”Hutchison said.

Thousands of unemployed Alabamians suddenly turned to new federally funded pandemic-related unemployment programs approved under CARES ACT.

“It was the extra $ 600 at the start, $ 300 at the end, that was added to all the other unemployment benefits,” Hutchison said.

These additional funds have become irresistible to criminals. A number of them have filed false statements, and some of them have been creative in stealing.

“We had so many scammers targeting the unemployed, pretending to be us,” Hutchison said.

Among the programs available was the Unemployment Pandemic Assistance Fund, or PUA. This program allowed self-employed workers to apply for unemployment. Something that had never been done before.

Those who are self-employed normally do not have a state-filed salary record, so finding proof of employment to qualify for unemployment benefits was a challenge, Hutchison said.

Overall, ADOL estimates that approximately $ 1.1 billion in federal and state dollars has been stolen. During that time $ 5.5 billion has been frozen.

“We were able to stop five times as much, which I think is definitely something we can be proud of,” Hutchison said.

Hutchison said that of the $ 1.1 billion that was taken, about 10% of that came from the state. She estimated it would be somewhere around $ 150 million.

According to ADOL’s Unemployment Benefits and Paid Claims Dashboard, approximately $ 5.2 billion has been paid to Alabamians from state and federal benefits since March 16, 2020.

Hutchison said that so far no one in the state has been prosecuted for filing a false statement. She said the department worked daily with federal and state agencies to track down these crooks and hold them accountable.

“The people who committed these crimes must be punished for it,” Hutchison said.

Hutchison predicted that it could take years, if not decades, for everyone who stole money to be arrested.

ADOL asks you to be on the lookout for criminals who try to take advantage of it. They say it’s extremely important that you keep your personal information private.

If you receive a letter from the ministry informing you that an application for unemployment benefits has been filed and you have not filed the application, ADOL asks you to report it immediately. You can do this online.

Hutchison added that the states unemployment rate remains at 3.1%. Alabama has been there for about three months now. The state was at a record unemployment rate of 2.6% before the pandemic.

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