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More than 40% of RI unemployment claims flagged as fraudulent during pandemic

Target 12

PROVIDENCE, R.I. (WPRI) – Almost 43% of all claims for jobless benefits in Rhode Island in the last year are suspected to be fraudulent, the R.I. Department of Labor and Training announced Friday, as the agency released detailed data on the problem for the first time.

Roughly 900,000 claims for unemployment benefits have been filed in Rhode Island since last March, and the new numbers show DLT has identified 382,684 of those as suspected fraudulent applications, including 56,365 of those that have been confirmed as fraud.

The agency said it has halted about 427,000 claims in total over that time frame due to fraud concerns, but about 44,000 of them were later found to be legitimate, allowing benefits to be paid out.

Matt Weldon, the newly appointed acting director of DLT, said $37.6 million in unemployment benefits have been paid out to confirmed fraudulent claimants, with another $209.6 million paid out to suspected fraudsters. Combined, that’s about 9% of the $2.8 billion in total jobless benefits dispensed during the 12 months of the pandemic.

But DLT argued the problem could have been far worse: the claims that were blocked would have otherwise resulted in $3.2 billion in fraudulent benefit payments.

“Quite frankly, I’m mad, I’m angry that it happened. I’m angry that our taxpaying employers that contribute to our fund were victimized,” Weldon said. “I’m angry for Rhode Island working families that can’t get into our systems in the way that they should be able to because these fraudsters, believe it or not, are calling us trying to validate their claims.”

About 25% of the money for jobless benefits currently comes from the state’s unemployment trust fund, which is funded by a tax on employers, with the rest from federal funding.

Hundreds of thousands of Rhode Islanders learned their identities were stolen in recent months when a letter from DLT arrived in the mail to confirm jobless benefits they never applied for. People who get the letter need to fill out a state police form to stop the benefits and notify the DLT the claim is bogus.

State officials are also urging people to file an identity theft report with the Federal Trade Commission and to routinely check their credit reports to monitor for fraudulent activity.

Weldon – who himself was a victim of the scheme – said for now, people should not expect to hear from DLT after they fill out the form. But the agency is working to change that eventually.

He also said the state is catching more fraudulent claims now than before using an artificial intelligence software designed to flag bad applications, and is working closely with law enforcement.

“We had to completely reform the way that we handle fraud,” Weldon said. “It’s an international fraud scheme that’s happening from coast to coast — it’s required us to change everything we do.”

Some households are now receiving a 1099G IRS document in the mail, asking them to pay taxes for the fraudulent benefits. The DLT has asked people who receive a 1099G to fill out a form to get an amended 1099G.

Tim White (twhite@wpri.com) is the Target 12 managing editor and chief investigative reporter at 12 News, and the host of Newsmakers. Connect with him on Twitter and Facebook

Ted Nesi contributed to this report

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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