Police and the state Department of Labor continue to investigate growing numbers of fraudulent unemployment claims as thousands returned to work from home this winter because of the COVID-19 pandemic, officials said, targeting New Yorkers involved in past data breaches.
Officials at every level of government, including police, attorneys and state or local executives, have reported heightened numbers of fraudulent unemployment cases and are warning residents to remain vigilant against potential attacks.
Columbia County District Attorney Paul Czajka warned residents Friday about increased scammers and criminals — likely international criminals — submitting unemployment insurance claims in the names of New York residents, leading to some residents appearing to owe hundreds, or even thousands, of additional dollars in income taxes, he said.
State Police from the Livingston barracks reported 17 fraud cases since the start of the pandemic.
Lt. John Rivero, with the Columbia County Sheriff’s Office, said he has seen a recent increase in the number of false unemployment insurance claims over the late fall and winter months.
“It’s always been a sporadic issue, someone’s personal information being compromised,” Rivero said. “But I would say as of recently, November, December, we’ve seen a large influx in these types of calls to the point where I’m probably seeing about five a day come across my desk from all different areas.”
State Attorney General Letitia James’s office does not regularly investigate cases of potential unemployment fraud and referred all questions to the Labor Department.
The state Department of Labor has identified more than 425,000 fraudulent unemployment claims since last March, according to statistics from the department Feb. 5. The majority of fraudulent claims were caught before money was paid to residents, resulting in $5.5 billion in savings.
Labor representatives declined to provide updated figures multiple times this week, citing ongoing investigations that take several months.
“We cannot give you a specific number as new fraud is being identified every day and we continue to work with financial institutions and law enforcement partners to recover more and more of the funds that were paid to fraudsters,” according to DOL Director of Communications Deanna Cohen. “These recoveries can take months, but we are committed to clawing back as much money as we can.”
The Labor Department cannot prosecute a New York resident, and did not have statewide statistics about the number of people criminally charged in relation to unemployment fraud this year or since the pandemic began.
Charges depend on each case and the prosecuting agency, Cohen said.
“That depends on the specific circumstances,” she added. “You would have to ask the law enforcement [or] prosecutorial agencies who pursue those cases. The DOL’s role is investigatory.”
The increased instances of fraud are not due to a breach of state Labor Department systems, Cohen said, but may be from previous hacks of other institutions such as banks, insurance companies or former employers.
“If someone is the victim of unemployment insurance fraud, it means their personal information — like their full name, date of birth and Social Security number — has been compromised and used to file a false claim under their name with the NYSDOL,” Cohen said.
The sheriff’s office works with the Labor Department to investigate cases of potential unemployment fraud.
“My recommendation is that people are diligent with their finances,” Rivero said. “They should monitor their checking and their credit reports. If you see something on your credit card bill that looks out of line, look into it. Make a report if necessary.”
Rivero said people should not overlook any irregularities with their credit or finances. He said with these claims a lot of people are getting notices in the mail. He said a person should immediately contact local authorities and report it to the Labor Department.
Greene County Sheriff Pete Kusminsky said the county has five recent cases, including one reported Friday morning.
The county’s five recent claims all stemmed from municipal employees. He said each victim of fraud was a county, town, village or school district employee.
“It seems like the cases seem to coincide with each time they seem to send employees home,” Kusminsky said. “Basically, a month after the county went back to 50% [capacity], we’re getting another round of these, and this is what happened back in March.”
Unemployment fraud existed before the pandemic, Cohen said, and is a battle plaguing all U.S. states and territories.
“It is a constant threat, and criminals often use times of crisis — like this pandemic — to strike,” she said. “Every state is fighting fraud.”
The Labor Department referred more unemployment fraud cases to federal prosecutors between March and August 2020 than the department handled in the last decade combined.
“You cannot stop criminals from fraudulently applying for mortgages, credits cards, unemployment benefits, etc,” according to Cohen. “However, we can catch the fraud before a single cent in paid and the vast majority of fraudulent claims have been caught before a single cent is paid on the claim.”
Czajka asked all police agencies to refer all such complaints of unemployment insurance fraud to the investigative division of the state Department of Labor.
Any person who receives a document about unemployment benefits from the state Labor Department but did not file a claim should immediately file a report with the department at on.ny.gov/uifraud.