State Auditor Thinks Almost 20% Of Unemployment Claims Were Fraudulent

Monday, August 2nd 2021, 6:12 pm
By: Brittany Toolis

Millions of Oklahomans turned to unemployment benefits to help put food on the table, but new numbers show millions of the $5.2 billion given out by the state didn't go to Oklahomans in need.

Oklahoma's State Auditor and Inspector Cindy Byrd said nearly 20% of the unemployment payments went to fraudulent claims.

"The agency has never expended that amount of money in that short amount of time," explained Oklahoma's Employment Security Commission's Executive Director, Shelley Zumwalt.

The COVID-19 pandemic forced millions to file for unemployment benefits seemingly overnight. 

Since March 2020, $5.2 billion in taxpayer dollars went towards those payments. Zumwalt said that sharp increase opened the door for people looking to cash in on the benefits.

"Any system that is 41 years old is going to have problems and that's where the cracks are going to come in when you have that type of volume going through something that's used to processing thousands not hundreds of thousands or millions," Zumwalt said.

"What we found is an error rate of about 19.7% in improper claims," said Byrd.

That would estimate out to roughly over a billion dollars in fraudulent payments. In 2019, the OESC found just two cases of fraudulent claims. State officials said fraudsters are also evolving.

"There were a large number of stolen identities and the fact that they were no longer being able to physically verify the identification of the claimant," Byrd said. 

"The line that you walk between stopping fraud and getting legitimate people paid is always changing,” Zumwalt said. "Every time you stop one type of fraud another one pops up."

Right now, in the investigation it's hard to say if most fraudulent claims came from people living here in Oklahoma, other states or foreign entities. The OESC said getting that money back may be a challenge.

"The longer that money ages the harder it is to recover. That being said, we have been aggressive. We are working with banking institutions and law enforcement to recover those funds and we have every intention of recovering every dollar we can," Zumwalt said.

The OESC said fraudulent claims are still under investigation and they continue to work to recover funds. The agency is also in the middle of a technology upgrade.