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Unemployment fraud schemes detailed in new Legislative Auditor reports

 (Wesley Muller/Louisiana Illuminator)
(Wesley Muller/Louisiana Illuminator)


Louisiana Illuminator

New reports the Louisiana Legislative Auditor released Monday detail fraud schemes that swindled more than $320,000 in unemployment payments in 2020 during the COVID-19 pandemic.

The head of the Louisiana Workforce Commission, which oversees the state’s unemployment system, says the reports are not new investigatory revelations but the result of its cooperation with auditors to identify how scammers were able to pilfer money.

One report explained how 49 separate claims were made to siphon more than $151,000 in pandemic unemployment benefits. Most of the claimants’ names and Social Security numbers did not correspond to a Louisiana driver’s license or identification card, and the majority of these claimants reported no wage income

LWC records show the claimants used the same or similar mailing addresses. They also used the same internet protocol (IP) addresses to change their names, contact information and bank account details.

Auditors found 43 of LWC claimants’ accounts were accessed within minutes of each other from the same IP address the original claimant used to direct $53,099 in benefits to at least two bank accounts held by family members. A total of 25 claimants received benefits totaling $79,891 on debit cards used to withdraw cash at the same locations and times when the original claimant used a debit card to withdraw cash.

According to Legislative Auditor Mike Waguespack, copies of the report have been provided to district attorneys in East Baton Rouge, Jefferson and Orleans parishes for the consideration of criminal charges that include fraud and identity theft.

A separate report explained how a claimant obtained $87,380 in unemployment benefits on behalf of 10 people other than himself. Six of the recipients were in Louisiana, and the other four were from outside the state.

Seven of the 10 claimants’ LWC accounts were accessed from the same IP address the original claimant used. The mailing addresses for the seven accounts were changed to the original claimant’s mailing address before they were sent debit cards. Records show the seven debit cards were used to withdraw cash at the same locations and times that the original claimant obtained cash.

One of the out-of-state claimants told the auditor her identity had been stolen and that she had contacted the Louisiana Workforce Commission after receiving an income tax form for the benefits she received. Another out-of-state claimant said he was indeed unemployed but had applied for and received benefits from Massachusetts, the state where he lives. His identity was used although he had never worked in or been to Louisiana.

A third report focused on a woman who fraudulently obtained pandemic unemployment benefits totaling $81,786 on behalf of 10 claimants. The auditor reached four claimants who said they did not know their identity had been stolen. A fifth claimant had died several years ago.

In each of her written responses to the Legislative Auditor’s reports, LWC Secretary Ava Cates says the recommendations for her department the auditor includes in each one “closely resemble a mere recitation of our current processes.” She added that her staff was in “routine contact” with the Legislative Auditor’s team to discuss hold times at LWC’s call center, claim payment delays and suspected fraud.

The fraud attempts cited in the reports were made shortly after the pandemic unemployment assistant program was launched in 2020, and none of the claimants in question would have qualified for regular state unemployment assistance, she said.

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