Lake County Gazette

State Rep. Martin McLaughlin (R-Barrington Hills) has taken aim at the Pritzker administration for failing to properly handle fraudulent unemployment claims.

"$1.9 billion -- yes Billion dollars with a B, were paid out on fraudulent IDES claims by the state," McLaughlin said in an Aug. 22 Facebook post. "This WAS AFTER we approved an emergency $24 million appropriation for fraud detection, but the Governor's administration did nothing to track the illegal activity, making the state's program vulnerable to the same type of abuse in the future. Where, to whom, and on what was the taxpayers' $24 million spent? Sadly, in Illinois, the buck stops nowhere."

Auditor General Frank Mautino released a report in June stating that of the $3.6 billion in Pandemic Unemployment Assistance (PUA) payments Illinois sent out between July 2020 and June 2021, more than half were fraudulent; an Illinois Newsroom release said. Almost $2 billion in payments were sent to scammers.

“Overpayments associated with identity theft and traditional fraud within the PUA program were unprecedented and resulted in fraudsters using highly sophisticated techniques to take advantage of the current economic condition created by the COVID-19 pandemic,” the audit stated, quoted by the Newsroom.

The U.S. Department of Labor (DOL) also criticized the Illinois government for neglecting to report fraudulent unemployment claims, stating that failure to track the fraud makes it easier for fraud to be committed in the future; a recent Illinois Policy release said.

“Without accurate state performance information, Congress and the [Employment and Training Administration] are not able to fully assess state activities and mitigate the risk of overpayments and fraud for future programs of a similar nature,” the DOL report said, quoted by Illinois Policy.

David Maimon, a criminology professor at Georgia State University, noted that online resources were available for those looking to exploit Illinois' unemployment benefits.

“We see many identities, many bank accounts, many driver’s licenses that are associated with Illinois residents” available for purchase on the dark web, he told Illinois Policy.

Although Illinois officials stated they updated software to improve security and the General Assembly passed two new laws cracking down on identity theft and fraudulent stimulus loans, some believe the new protections do not go far enough. 

“They’re claiming it’s fixed, and I’m telling you, it’s not fixed," Haywood Talcove, CEO of LexisNexis Risk Solutions, told Illinois Policy.

Nationwide, an estimated $163 billion in unemployment payments were fraudulent, the Newsroom said. In response to the audit report, Illinois Republicans called for hearings to investigate the Illinois Department of Employment Security's (IDES) procedures in making unemployment payments to determine whether the agency failed to follow recommendations for fraud prevention.

After Pritzker ordered businesses to shut down in the spring of 2020, Illinois saw a huge spike in unemployment claims, leading to the accumulation of billions of dollars of unemployment debt; The Center Square reported. Although Illinois put some federal COVID-19 relief funds toward paying down the debt, there is still a remaining balance of approximately $1.8 billion that is accruing interest.