SC investigating 2,800 potentially fraudulent unemployment claims since COVID began

Joseph Bustos
·3 min read

South Carolina had more than 2,800 potentially fraudulent unemployment claims since the beginning of the pandemic, according to the state Department of Employment and Workforce.

The 2,855 jobless benefits claims sent to state and federal law enforcement for investigation represent less than 1% of the more than 850,000 people who filed initial claims with the DEW since March 15.

Unemployment claims increased in the last year as the pandemic wreaked havoc on the economy and as state governments put in varying restrictions to slow the spread of the virus.

To help people out of work, the federal government increased jobless assistance to a level that critics said went too far and discouraged people to return to their jobs.

Since March 15, DEW has distributed more than $5.3 billion in federal and state unemployment insurance benefits. More than 850,000 people in the state have filed for unemployment assistance since the pandemic began, according the DEW’s website.

However, DEW sent less than 1% of claims to state and federal law enforcement for investigation and prosecution.

Increased federal and higher unemployment benefits around the led to state employment agencies around the country seeing high amounts of fraudulent claims.

“The federal programs created to help people through the pandemic have, unfortunately, also been very susceptible to criminals eager to take advantage of these funds and circumvent the law for their own financial gain,” said DEW Executive Director Dan Ellzey.

DEW did not disclose the value of the 2,855 claims it has turned over to state and federal law enforcement as of February.

The country saw $63 billion in fraudulent claims since the beginning of the pandemic, according to the Department Labor.

The U.S. Justice Department is investigating unemployment fraud by “transnational criminal organizations, sophisticated domestic actors, and individuals across the United States,” Joshua Stueve, a spokesman for the department’s criminal division told the Associated Press.

DEW said potentially fraudulent claims sent to federal officials have gone to the U.S. Department of Justice National Unemployment Insurance Fraud Task Force, but did not directly say if those cases involved transnational criminal organizations.

Some states saw high amounts because they had not joined a data exchange run by the National Association of State Workforce Agencies as recommended by the federal government.

DEW said the agency added new security and anti-fraud measures including software and staff to detect fraud in the unemployment insurance program, including having ID verification systems to cross check claims from applicants.

DEW also has 68 people on staff to investigate fraud allegations.

“As stewards of state and federal funding, we are tasked with ensuring the integrity of the unemployment insurance program and have a zero tolerance policy against fraud,” Ellzey said.

South Carolina’s unemployment rate was 2.4% prior to the pandemic. As economic restrictions were put in place to slow the spread of the virus, the state’s unemployment rate reached 12.8% in April. In December the unemployment rate was 4.6%.

The Associated Press contributed to this article.