$15 million in state unemployment funds paid to fraudulent claims

Coronavirus

HONOLULU (KHON2) — Weeks ago, the state was alerted to fraudulent claims connected to the Pandemic Unemployment Program or PUA.

The Hawaii Department of Labor and Industrial Relations (DLIR) said scammers used information from thousands of Hawaii residents, which was stolen from past data breaches, to steal millions of unemployment money from the state.

So far officials say 5,989 people have come forward to report that someone was trying to file a claim under their name through PUA.

Officials also say scammers have tried to take more than $92 million from the state. While the DLIR has been able to block most of those claims from getting paid out (about $76,644,808), more than $15,829,889 fell into the hands of criminals.

“We were surprised, we weren’t expecting that big of a hit,” said Anne Perreira-Eustaquio, DLIR deputy director.

She said since PUA is new and not vetted as well as it could have been, scammers slipped through.

 “For PUA it’s a little different. It’s much more flexible. There [aren’t] as many eligibility requirements as there are for regular unemployment, so really just having their personal data was enough,” said Perreira-Eustaquio.

This information includes name, social security numbers and birth dates.

She said they’ve made major changes to the system since then, including more vigorous identity checks.

“Not only is it a false payout to those who don’t deserve it, but it actually ends up making the system slower because we have to put in more checks in the future that it ends up slowing down the processing time for those who legitimately need it,” said Rep. Aaron Ling Johanson, House Labor and Public Employment Committee chair.

The DLIR say the extra steps to verify identities have created a backlog that is delaying benefits for PUA claimants, and it could have some people waiting weeks or longer for their benefits.

Representative Sylvia Luke, chair of the House Finance Committee, said increased staffing at the unemployment office is helping address both issues.

“It really comes down to us having enough state employees to handle the claims, double check, and that’s why we continue to have the convention center running. We have the overflow,” said Luke. “We need to balance, how quickly do we need to get the money out [and] at the same time put in some safeguards.”

The DLIR said they are continuing to investigate where that $15 million of fraudulent claims went and are working with the U.S. Department of Labor and the Attorney General’s Office to mitigate any fraud in Hawaii.

They say if you receive a letter from the unemployment office, but did not file, to report that letter to them. For more information you can visit the State Department of Labor and Industrial Relations website here.

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