UIA scammers steal benefits, identities, trust

·6 min read

Sep. 26—LANSING — Gerald and Elnore Corwin were married in 1965, two weeks before Elnore turned 20, and the couple spent 42 years together before Elnore died in 2008.

In February — 13 years after Elnore's death — Gerald said the Michigan Unemployment Insurance Agency mailed her a letter confirming she'd applied for benefits.

"It came in her name, where she was drawing unemployment, and I tried to reach out to them with no luck whatsoever," Gerald Corwin said. "It was outright fraud. I don't know how they got it, but somebody must've stole her social security number."

The letter Gerald Corwin pulled from his mailbox wasn't a mix up meant for him — the retired bus driver said he didn't apply for benefits during the pandemic, and hasn't for decades.

But it also isn't an anomaly, information shared in a September hearing before Michigan's House Oversight Committee shows.

In July 2020, the state tasked Deloitte Ltd., a financial consulting firm based in the United Kingdom with offices in Detroit, Grand Rapids and Midland, with reviewing possible fraudulent UIA claims and related identity theft.

By November of last year, Deloitte staff estimated the state paid out as much as $1.5 billion in fraudulent claims and Acting UIA Director Liza Estlund Olson acknowledged the agency's efforts to balance fraud prevention with timely payments to claimants increased their exposure to fraud.

Olson appeared before the oversight committee Sept. 9 , where she said the UIA had stopped payment on more than 500,000 claims that were "of fraudulent identity" before any money was paid out.

"We continue to have — well, before Sept. 4 — a significant amount of fraudulent applications coming in," Olson said.

That early September date was the day a federal program, expanding jobless benefits by adding $300 weekly payments to what claimants were already receiving from the state, ended.

As of Tuesday, 42 people have been charged with defrauding Michigan's UIA, an agency spokesperson said.

In a case prosecuted by the Department of Justice, Linda Bosquez, 59, of Sioux City, Iowa, was sentenced to six months in federal prison after admitting to a COVID-19 unemployment scheme which netted her $24,235.

The funds came from the U.S. Treasury as well as state coffers in Georgia, Ohio and Michigan, information from the Department of Justice shows.

Corwin said that's what he wants to happen to whoever applied for benefits in Elnore's name — for someone to go to jail. Especially after two more letters addressed to his wife arrived weeks and even months after he'd sent the first one back.

Corwin said he was out of patience, and responded to the last one with a salty note to the UIA.

"I was a little rough on them that time," Corwin said, of this third correspondence to the UIA. "Elnore was disabled the last years of her life. I told them they were — well, I told them they all ought to be fired. And I still never got a reply."

Corwin tried to get satisfaction through the Wexford County Prosecutor's Office and the Michigan State Police but said he was told, "we don't do that."

Lt. Derek Carroll, MSP spokesperson, said anyone who suspects unemployment fraud should report it to the UIA's fraud division. Carroll said MSP fielded a lot of calls in previous months about fraudulent claims, though they've begun to lessen in recent weeks.

Corwin said he sent Elnore's letters back to the UIA's main office, but another man who suspected his identity had been stolen did make a report to the agency's fraud division. And expressed frustration over the seeming lack of communication within the agency.

Kennard Weaver, an attorney from Indiana who retired to Old Mission Peninsula in 2006, never filed for unemployment benefits in any state during his decades-long legal career and never worked in Michigan.

Yet in March 2020, Weaver received a notice from the UIA that his claim for unemployment benefits had been approved. He alerted the state's Department of Labor and Economic Opportunity, and a staff member there said the LEO does not have access to UIA accounts.

Like Corwin, Weaver tried the MSP and he also emailed the state's Attorney General's office, both of which directed him to UIA's fraud division and the online reporting form, which Weaver says he filled out and submitted.

Weaver said after he received an email response which stated, "Your fraud claim has been filed," he began to think the problem might have been solved.

Until, that is, he received another UIA letter June 28, again stating his unemployment claim had been approved.

"It's clear that within the agency the people who investigate are not telling the people who are writing the checks that there's a fraud," Weaver said. "Which means, this thing is totally out of control. It's frustrating as a taxpayer. Because we're paying for this."

Olson told house oversight committee members those who report fraud, might not be informed of an investigation because agency staff can only speak to claimants about their claim, not someone else's.

If someone didn't file a claim at all, that appears to leave them in a bureaucratic limbo, committee members found.

Olson said all reports of fraud are immediately flagged for investigation and payments on the claim stopped, even if the reporting party isn't informed of this.

Olson also said the problem isn't unique to Michigan — most if not all states in the U.S. have been plagued with fraudulent pandemic-related unemployment claims, she said.

Identify theft resulting in fraudulent claims can cause problems with a victim's tax liability, and some faulty 1099s have been issued, the agency previously acknowledged.

The Internal Revenue Service is aware of the issue, Olson said, though claimants and others should review all documents carefully and report any mistakes to the UIA.

Federal government policy changes, which have numbered as many as 50, software coding changes which number in the hundreds and a request by the UIA to continue to employ additional temporary staff which has yet to be approved by the legislature, hasn't helped, Olson said.

The day of the Sept. 9 committee hearing, the UIA announced it began to research the cost of updating the agency's computer system and on Sept. 13 an RFI, or request for information, was posted on the state's website for vendor opportunities.

The agency had planned to begin the process much sooner, Olson said, but was delayed by the pandemic. In the meantime, staff have no choice but to continue to use the current system, she said.

"I can't go back to tapping out an adjudication form on a rock like we are in the Flintstones," Olson said. "We have to use what we have available to us."

The RFI closes Oct. 18, the UIA's current system, MiDAS, is more than a decade old and the RFI will provide needed details for the agency to put together an RFP, or request for proposals, Olson said.

In the meantime, Olson said the UIA soon will begin an initiative to use plain language in its letters and forms, improving what she called the agency's "public facing user experience."

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