Maine investigates more than 1,000 fraudulent unemployment claims
The number of unemployment claims filed each week in Maine has skyrocketed since the onset of the COVID-19 crisis, outstripping by far even levels during the Great Recession.
Maine officials are investigating at least 1,000 reports of potential fraud involving the state’s overburdened unemployment benefit system and organized crime, the Department of Labor said Wednesday.
The department has already found and canceled 2,200 fraudulent applications for unemployment compensation, which have used stolen information such as names and Social Security numbers. To handle all the claim cancellations, the DOL had to halt benefit processing for two days this week, according to a news release.
The Labor Department expects the number of illegal claims to grow as investigations continue. There’s no estimate yet of how much money scammers may have bilked from the unemployment system. But based on the experience of other states, the department said, benefit payments made on fraudulent claims could total millions of dollars.
In a briefing Wednesday, Gov. Janet Mills called the fraud a “national phenomenon.”
"It's an organized crime effort to some extent," she said. The fraudulent claims all "appear to be similar in nature," and are considered part of a widespread scheme identical in other states.
The New York Times recently reported that seven states have been targeted; Maine was not among them, but Massachusetts and Rhode Island were. A memo from U.S. Secret Service investigators suggests a Nigeria-based fraud ring is behind the scam, the Times said.
In Maine, the Labor Department and the office of Attorney General Aaron M. Frey are working with other state and federal agencies to investigate the fraud cases and prevent further ones.
"While fraud is not new or unique, organized criminals across the nation are now targeting unemployment programs expanded during the pandemic in unprecedented ways," Labor Commissioner Laura Fortman said in the release.
“The Department of Labor takes our responsibility to defend the integrity of Maine's unemployment seriously and we will continue to work closely with state and federal law enforcement officers to prevent, identify and rectify cases of fraud wherever they occur.”
Making the worst of the pandemic
The crime spree comes as the number of Mainers applying for unemployment benefits skyrockets to never-before-seen levels, largely driven by the pandemic.
Roughly 142,000 initial claims have been filed since March 14, according to the state. Over 30,000 claims were filed from March 29 to April 4, the most ever in a single week. Prior to the onset of COVID-19 in Maine, weekly claim filings had been totaling under 1,000.
Investigators theorize that criminals view maxed-out unemployment benefit programs as ripe targets for scamming. Individuals whose identities are used typically have jobs and aren't seeking benefits.
One of the employers whose personnel appear to be affected is the Windham-Raymond School District, Regional School Unit 14.
The district on Thursday notified employees via email, saying: “We have been informed that the DOL has been receiving fraudulent claims for unemployment for active employees, who would not be eligible to apply. There appears to be some sort of data mining being done, pulling many names of RSU 14 employees — including the Superintendent — plus employees from other school districts in the area.”
Elizabeth Patterson, a Portland teacher who works for two school districts in southern Maine, reported a similar incident.
On Wednesday morning, Patterson learned from human resources staff that her identity had been used to apply for unemployment. She quickly alerted the state, changed passwords and other personal information, and has been checking to make sure her bank accounts haven’t been compromised. So far, so good.
But the experience has been “emotionally shocking,” she told Mainebiz.
“It’s frightening to think about, especially at such an unfortunate time, when everyone is already feeling vulnerable,” she said. “And teachers don’t have tons of money to be lost this way.”
The state is encouraging anyone who believes their information has been used to file a fraudulent unemployment application to notify the Labor Department via this form.
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There were some fraudulent claims at St. Mary’s Hospital in Lewiston, my wife was one of them and she was told there were more.
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