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Unemployment fraudsters wear masks and read scripts trying to access benefits, according to leaders

CDLE confirms $19.37 Million lost to fraudsters claims suspected unemployment fraudsters trying to trick investigators
Posted at 5:35 AM, Apr 22, 2021
and last updated 2021-04-22 08:31:26-04

COLORADO SPRINGS — More than a year into the impact of the coronavirus pandemic leaders at Colorado's Department of Labor and Employment continue to battle fraudsters on a daily basis looking to cash in on unemployment benefits that many legitimate applicants are still waiting for. CDLE officials and investigators give us a look at the situation.

Historic unemployment levels and a seemingly endless number of cyberattacks are still fueling unemployment fraud in our state and across the country.

The State of Colorado is now working with expert investigators from who are coming face to face with fraudsters, denying them benefits. provided News 5 with pictures showing fraudsters are literally wearing masks in video chats to try to trick officials into allowing them to collect unemployment dollars. One of the leaders of says his company is working with Colorado and more than 20 other states to expose the fraudsters. sent this photo to KOAA News 5 as an example of some of the things they encounter on video chats to verify identities for unemployment benefits. Leaders at say this is an example of a fraudster wearing a mask to try to fool investigators.

"So we don't know who is on the phone until we get in front of them and it's not necessarily someone wearing a mask. It's somebody off screen who is coaching somebody on a script telling them to say this now, say that now. We're watching that and we're filming that. We're letting that play out so we can capture that and share that with law enforcement," said Senior Vice President of the Public Sector Pete Eskew. "What that's also doing is it is preventing the legitimate person who is waiting in line they might have to wait a little bit longer. That happens as a natural course of supply and demand here."

Another example of a mask leaders say they came across during an ID verification process dealing with unemployment benefits.

There are thousands of suspected fraudulent claims that the state's labor department and other investigators are still working through to see if the benefit payments went to legitimate claimants or to the fraud schemes, but here's what they have confirmed. 42,976 unemployment claims were fraudulent, the state lost $19.47 million to fraudsters in the process, but state officials claim they've prevented paying fraudsters $437 million.

"In 2019 we had less than 90 fraudulent claims to investigate in the entire year. Now we are dealing with more than a million suspicious claims," said Joe Barela of the Colorado Department of Labor and Employment.

Colorado's labor department leaders say in addition to attacking the unemployment system itself, fraudsters are posting on social media and reaching out to local news stations to complain about the unemployment system in an attempt to get officials to pull back on controls that have now been put in place to stop the fraud.

"We must walk a tight rope. We know we have to get those payments out to legitimate claimants as quickly as possible, but with unprecedented fraudulent activity we have to put in measures that prevent fraudulent players from accessing the system and payments going out the door," said Barela.

As the Colorado Department of Labor and Employment works to make things more difficult for fraudsters, Colorado Attorney General Phil Weiser continues to lead a task force made up of the top legal and law enforcement minds in our area to go after people who are committing unemployment fraud.

There is lot still developing in this area, News 5 will continue to keep you updated on this story.