DENVER (CBS4) – Five weeks after announcing that scammers stole about $ 6.5 million from Colorado’s unemployment system during the pandemic, state unemployment administrators increased that number dramatically. They say they now believe that scammers got away with it
$ 30 million since the pandemic started.
“That number will grow exponentially,” said Cher Haavind, assistant executive director of the Colorado Department of Labor and Employment. Haavind and other CDLE officials spoke to CBS4 Tuesday afternoon after CBS4 learned of the surge in dollars that had been fraudulently stolen from the agency and not recovered over the past year.
CONTINUE READING: Improper vaccine storage forces Coloradans to do another round
“Somewhere between $ 20 million and $ 30 million,” Haavind admitted. “That’s probably somewhere nearby.”
She said the department plans to release more details at a press conference later this week.
Most of the money was stolen from the Pandemic Unemployment Assistance program last spring and summer, CDLE officials said.
Phil Spesshardt, Colorado’s unemployment insurance director, said the state programs were originally set up with very few checks and balances in the system so that the unemployed could get paid quickly during the pandemic.
“Unfortunately, this created a great opportunity for fraudsters,” said Spesshardt.
He said Colorado, like other states, is unprepared for the volume of jobless claims and related fraudulent claims that have come with the economic impact of the pandemic.
Throughout 2019, Colorado had around 90 cases of fraud in its unemployment system. By the end of 2020, nearly a million fraudulent claims had been made against Colorado’s unemployment system, according to state authorities. The states were unprepared for the scale of the fraud and did not have the staff to address the false allegations.
CONTINUE READING: Colorado Health Expert Addresses Growing Fears of Johnson & Johnson Vaccine
Spesshardt described the fraud rings as sophisticated and constantly evolving to defraud the state systems for unemployment claims. He said some of the fraud was likely due to crime rings in other countries such as Nigeria, China and Russia.
Haavind said when the state rolled out a new system in January, 36 users from Nigeria attempted to file unemployment claims in the first five minutes.
As the state put new measures in place to combat fraudulent claims, the payout of some legitimate claims has slowed as the CDLE has put accounts on hold to ensure recipients are legitimate.
That left a trail of frustrated applicants.
The U.S. Department of Labor estimates that $ 63 billion was improperly paid out due to fraud or errors in pandemic-related unemployment programs across the country.
It has been estimated that California has fraudulently paid out $ 11 billion in unemployment claims. Ohio is estimated to have paid more than $ 300 million in false unemployment claims, and Washington State estimates that it has paid hundreds of millions of dollars in fraudulent unemployment claims.
Colorado officials expect their fraudulent damage numbers to rise.
MORE NEWS: “Less than 1 in a Million”: Colorado Doctor Reassures Those Who Have Received the Johnson & Johnson Vaccine
“This version of the scam is here to stay,” said Spesshardt. “Here, now and forever at this point in time.”