Pennsylvania takes step to stop jobless benefits fraud

The state is taking additional steps to prevent criminals from illegally siphoning money from a federal unemployment compensation program by filing fraudulent claims, including delaying payments to allow for more time to verify the identity of those seeking the benefits.

Those benefits, Pandemic Unemployment Assistance (PUA) benefits, are designed for business owners, self-employed workers, independent contractors and workers with a limited work history who are jobless because of covid-19.

“Payments are being postponed under new verification methods are put in place,” said Labor & Industry Secretary Jerry Oleksiak this week. Oleksiak declined to reveal what measures are being taken to stop the fraud.

The state is delaying the release of PUA benefits because it experienced a big jump in the daily claims, from about 5,000 to 20,000 late last week, said Susan Dickinson, director of the state’s unemployment compensation benefits policy.

That jump set off alarms that fraudulent claims were flooding the system.

Oleksiak said many of those claims came from outside Pennsylvania and are made by criminals using stolen Pennsylvania identities in seeking the PUA aid.

The PUA program probably was targeted because it was easier for people to submit claims, Dickinson said.

“The safeguard weren’t there as much as in traditional (unemployment compensation) programs,” Dickinson said. Part of the PUA system that allowed claimants to backdate their requests for money has been eliminated and a manual verification system is being instituted that will take longer, Dickinson added.

The state saw the fraud in the first few weeks of the Pandemic Unemployment Assistance progam, which was funded by the federal CARES Act passed in late March. That illegal activity declined after the implementation of certain measures, which Oleksiak did not reveal.

In early summer, the state said it had stopped about $44 million in fraudulent claims for the benefits.

The U.S. Attorney in Pittsburgh and state Attorney General Josh Shapiro announced in August that 33 people had been charged in a jobless benefits scheme, including eight inmates in state and county jails who allegedly used accomplices on the outside to get money from the system.