I-Team: Texas Paid Out Fraudulent Unemployment Claims Months After They Were Flagged As Fraud

Since the start of the pandemic, the TWC has tagged more than 373,000 unemployment claims as suspicious. The CBS 11 I-Team has discovered some claims are being paid out long after they were flagged for fraud.

Video Transcript

- Since the start of the pandemic, nearly 400,000 unemployment claims here in Texas alone have been flagged as fraudulent. But despite being flagged, the CBS11 I-Team discovered some claims are still being paid out. Investigative reporter Brian New with a gap in the system that has allowed fraud cases to go on for months.

BRIAN NEW: When the Texas Workforce Commission sent a notice in the mail to a Dallas company saying someone applied for unemployment benefits under Scott Tims's name--

SCOTT TIMS: Of course, that was a shock to them and a shock to me. I've worked here for 16 years.

BRIAN NEW: --Scott says he and his employer immediately contacted TWC to report the fraud.

SCOTT TIMS: I didn't receive anything for a long time. So, you know, like a fool, I thought everything was fine.

BRIAN NEW: Nearly six months later came another notice in the mail, this one saying Scott owed more than $7,000 in overpaid benefits.

SCOTT TIMS: What this means is that my employer, you know, flagged it as fraud immediately. But for a long period of time, they kept making payments to whoever perpetrated the fraud.

BRIAN NEW: Scott once again immediately called TWC.

SCOTT TIMS: I've been calling for many, many weeks. I've received no contact from any person there whatsoever. And yet these problems are mounting for me, and it's on me. It's my problem.

BRIAN NEW: What's so frustrating, Scott says, is just last month, he listened to TWC Director Ed Serna on our station talk about how to stop fraud.

ED SERNA: If they receive a notice from TWC, whether they are an employer or an individual, don't ignore it.

BRIAN NEW: And that's what he did. Scott didn't ignore it. But he says it didn't help. TWC says 75% of fraud activity is caught and stopped before any money goes out. But the state agency told the I-Team because of a large number of reported fraud cases, sometimes the process of locking an account can take some time.

TWC says its investigators are working long hours on these fraud cases. But because of privacy concerns, it could not comment directly on Scott's case. Meanwhile, Scott has received another notice, this one telling him that he owes taxes on those unemployment benefits that he never received and that he reported as fraud. In Frisco, Brian New, "CBS11 News."