Maryland Department of Labor – Updates on Fraud Investigation

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Maryland Department of Labor (Labor) Secretary Tiffany Robinson has announced that Maryland has been awarded $2,430,000 in funding from the U.S. Department of Labor (USDOL) to support Maryland’s ongoing efforts to prevent and detect unemployment insurance fraud. The initial fraud investigation announced has been completed, with nearly 95% of claims initially investigated determined to be fraudulent. As a result of aggressive security measures, the department has detected additional out-of-state and in-state fraudulent claims.

“As our department works to provide unemployment benefits to all eligible claimants, bad actors are still trying to capitalize on the additional funding available during the COVID-19 pandemic intended to help those truly in need,” said Labor Secretary Robinson. “Our top priority is to provide relief to legitimate claimants who need it the most, but the high level of fraud surrounding these federal programs does require us to carefully and manually review each claim. Our actions to tackle this fraud have saved taxpayers hundreds of millions of dollars, and we will continue to coordinate our investigation with the U.S. Department of Labor and the U.S. Attorney.”

Initial Fraud Investigation Complete

In July, the State of Maryland announced that it had uncovered a massive and sophisticated criminal enterprise that filed tens of thousands of fraudulent unemployment insurance claims. Labor quickly detected, reported, and blocked this fraudulent out-of-state claim activity, saving taxpayers hundreds of millions of dollars. The state’s review of this initial fraud investigation is now complete:

  • Of the 48,280 total out-of-state claimants that had their Bank of America debit cards cancelled and were prompted to verify their identity by uploading additional documentation to their portal, 43,664 claimants did not upload any documentation.
  • Of the 4,616 claimants that uploaded documentation, 2,502 (54.2%) of claims were approved and reinstated after conducting a thorough manual review. 2,114 (45.8%) of those claims were determined to be fraudulent and denied.
  • In total, 45,778 (94.8%) of claims were determined to be fraudulent.

Additional Fraud Detected Through Aggressive Security Measures

With aggressive security measures in place, the department has detected additional potentially fraudulent claims:

  • An additional 95,402 out-of-state claims have been identified as potentially fraudulent, with a minimum of 87,013 (91.2%) claims not uploading documentation or being denied to date.
  • An additional 57,577 in-state claims have been identified as potentially fraudulent, with a minimum of 36,142 (62.8%) claims not uploading documentation or being denied to date.

A team of specialists is focused solely on the manual review and verification of all documents submitted by these out-of-state and in-state claimants.

Labor continues to coordinate its investigation with the U.S. Department of Labor’s Office of the Inspector General (OIG) and the U.S. Attorney’s Office.

More Than $2.4 Million to Combat Fraud in PUA and PEUC Programs

Since the beginning of COVID-19, state workforce agencies across the country have faced an unprecedented increase in the number of individuals filing new claims to receive benefits from both the regular unemployment insurance program and the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act programs. Every state has faced significant challenges due to increased fraudulent activity and identity theft amid new and emerging fraud schemes, particularly in the federal Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs.

As a result, Maryland has been awarded $2,041,200 to combat fraud in the PUA program and $388,800 to combat fraud in the PEUC program. States are permitted to use this targeted funding for staff or contract services to conduct fraud investigations and other fraud detection-related activities, and to implement tools to increase prevention, detection, and recovery of fraudulent improper payments in the PUA and PEUC programs.

Paid Over $6.8 Billion in Benefits

As of the week ending September 12, Labor has paid $6.8 billion in benefits from the CARES Act, Extended Benefits, and regular unemployment insurance programs. Approximately 96% of all complete claims have been processed and approximately 4% of claims are pending in adjudication, which is consistent with pre-pandemic levels.

If you believe that your information has been used to fraudulently file an unemployment insurance claim, please contact Labor’s Division of Unemployment Insurance by visiting MDunemployment.com or e-mailing ui.fraud@maryland.gov. To receive updates and additional information about unemployment insurance programs in Maryland, visit MDunemployment.com.