NewsCovering Colorado


New fraud monitor stops suspicious unemployment claims

Posted at 4:30 PM, Sep 10, 2020
and last updated 2020-09-11 08:50:53-04

DENVER, Colorado — Colorado's unemployment statistics were recently revised down for the summer. During a video conference with reporters Thursday, a spokesperson for the Colorado Department of Labor and Employment explained that new fraud safeguards alerted state officials to tens of thousands of suspicious claims.

"We implemented a new fraud trigger at the end of August that proved to be very successful in flagging what we saw as an incredible instance of fraud," said Cher Haavind.

The state stopped payment on roughly 48,000 claims filed between mid-July and mid-August. Haavind said the discovery saved taxpayers hundreds of millions of dollars.

However, around $40 million had already been distributed by the time the scheme was detected.

"That breaks down to about $830 per person if you do the math there, which is a few weeks of payments,” said Jeff Fitzgerald, the Unemployment Insurance Division Director. “Some (payments) we stopped in week one, others we stopped in week six."

The department's internal investigators are working with state and federal authorities to try and arrest and charge those responsible.

Fitzgerald is confident the claims were not filed by people making honest mistakes.

"The nature of what we're looking at is quite sophisticated,” Fitzgerald said. “It is not something that a common individual would not be able to do, and it points to orchestrated, very sophisticated large fraud schemes."

All of the suspicious claims were seeking Pandemic Unemployment Assistance (PUA.) The expanded federal benefits program has fewer safeguards than traditional unemployment insurance.

"We believe that all of our fraud detection efforts, quite frankly, are above and beyond anything that the feds have required and have saved hundreds of millions from going out the door," Haavind said.

Congress recently made an extra $100 million available to states to help fight fraud associated with the Pandemic Unemployment Assistance Program. Colorado has applied for a $2 million to help with its fraud prevention efforts.