‘I’m sorry,’ Nevada unemployment chief says as thousands await appeals; $2B paid out in fraud
LAS VEGAS (KLAS) — The Nevada Department of Employment, Training and Rehabilitation (DETR) inadvertently handed out $2 billion in fraudulent pandemic payments, its director tells the 8 News Now Investigators, as thousands wait to plead their cases as to why they should be paid or keep the money the agency already gave them.
Nadine Simmons, 51, is one of those Nevadans awaiting a hearing date for her appeal. Simmons, a mother of two grown children, was evicted in 2022.
She has lived in her car since.
“You don’t have a place to take a shower or brush your teeth,” she said. “It’s really hard.”
All of her belongings are in her car, she said. Some of her items, including her citizenship certificate were in a storage unit. But after months of nonpayment, the storage company cleared it out.
Simmons worked as a customer service representative for a travel business when the pandemic hit and she lost her job, she said. Soon after, she, like hundreds of thousands of Nevadans, started receiving unemployment money.
“What was that money helping you with when you were getting it?” 8 News Now Investigator David Charns asked Simmons.
“My rent, supporting my children, feeding my children, keeping a roof over my head and paying my bills,” she said. “And then about a month after they made payment they said, ‘Oh we paid overpayment. You now owe money.’”
In 2022, the payments stopped, leading to her eviction. She then found out she owed DETR $5,000 in overpayments. As of Wednesday, Simmons was awaiting the appointment for her latest appeal as to why she would not only receive benefits as she looks for a job but also why they should wait for that $5,000 bill.
The agency has waived more than 95% of waiver requests, a spokesperson said.
“I get so upset when people say, ‘They’re lazy. They want to be on the street. They just want free handout,’” Simmons said. “It’s not like I’m not trying.”
Republican Nevada Gov. Joe Lombardo appointed Christopher Sewell as DETR’s new director in 2023. Sewell was promoted from within the agency.
“I’m sorry,” Sewell said about the department’s post-pandemic performance. “This shouldn’t have happened. We weren’t prepared and I apologize.”
After years of delays, DETR is meeting federal Department of Labor standards in timeliness for reviewing unemployment claims and hearing appeals, Sewell said. With the backlog down to 5,000 from 40,000 last year, Sewell has a lofty goal.
“We’re going to get these taken care of and we’re going to be back to normal by summer,” he said. “100% back to normal.”
Sewell plans to do that by moving employees already within DETR to hear claims, he said. Employees from four other states are also coming to help.
“Did the state fail people like that?” Charns asked Sewell about people like Simmons.
“I think during the pandemic the order was just to make sure we could get money out on the street, and we did it quickly and we cut corners,” Sewell said.
Last year, Sewell estimated DETR paid out $1.4 billion in improper payments, which included overpayments and fraud.
“Now this is the number that’s going to scare everyone: $2 billion of that was in fraudulent claims that we paid out,” Sewell told Charns, updating the number. The money came from the CARES Act Congress passed in 2020 to help keep Americans afloat amid the early months of the pandemic.
“How does a state agency give out $2 billion of fraudulent money?” Charns asked.
“We had to trust people — and unfortunately there’s people out there that took advantage of that system,” Sewell said, adding because Nevada lacks an income tax, additional checks, like one from a tax department, never happened.
Alongside clearing its backlog and hearing new appeals, DETR is slowly getting its money back as prosecutors charge crooks. Out of the staggering $2 billion – equal to a little less than half of the entire state general fund – DETR had recovered more than $200 million as of this month.
“DETR needs to fix whatever they had going on,” Simmons said, adding potential employers do not take her seriously amid her situation. “I don’t even know if there’s a fix now at this point other than getting payment so I can pay bills, pay back family members, pay back friends that loaned me money. I don’t know what the fix is.”
The backlog and fraud issues are not just a problem in Nevada. The Department of Labor reports a nationwide problem of overpayments and theft. The majority of the money state unemployment departments gave out during the pandemic came from federal coffers.
Last year, the Nevada Legislature invested millions of dollars in a new system at DETR to improve customer service. Allegations of unemployment fraud can be reported to DETR online at detr.nv.gov.
8 News Now Investigator David Charns can be reached at dcharns@8newsnow.com.
Editor’s note: While California license plates appear on the car in this story, the 8 News Now Investigators confirmed Simmons’ Nevada residency.
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