$3.4M in fraudulent unemployment claims paid out in 2020

JACKSON, Miss. (WLBT) - Payouts from fraudulent unemployment claims in Mississippi skyrocketed during the pandemic, nearly doubling the number of payouts from the previous year.

In 2020, the Mississippi Department of Employment Security (MDES) says it paid out $3.4 million from fraudulent unemployment claims. These are federal funds given to the state.

That’s about 7,800 claims, MDES says.

In 2019, MDES said it paid 3,557 fraudulent unemployment claims a total of $1,743,417.00.

But Mississippi is not alone.

Nationwide, simple tax forms being sent to people who never collected unemployment benefits are revealing their identity was likely stolen months ago and used to claim bogus benefits that have totaled billions of dollars.

By November, the U.S. Department of Labor’s Office of Inspector General estimated states across the country had paid as much as $36 billion in improper benefits.

In California alone, state officials say the fraud totaled at least $11 billion, $810 million fraudulent payments to prison inmates.

The federal government’s $1.7 trillion relief package being tossed around in Washington also expands unemployment aid.

In an effort to double down on fake claims, MDES says it’s, “implemented several strategies, identity verification tools, and partnerships with other state and federal agencies to help to detect, identify, and prevent the filing of fraudulent claims, and recoup the funds that were paid on fraudulent claims.”

The state did not expound on what federal agencies they’re partnering with or the specific work they’re doing, but if caught, you will face consequences.

The Unemployment Insurance Division may assess a time disqualification as well as requiring repayment of benefits. Mississippi may seek criminal prosecution, and an individual may be fined a maximum of $500.00 and/or sentenced to 30 days in jail for each claim filed, MDES says. Fraud penalties vary depending on the degree of fraud involved.

MDES also says failure to fully pay the debt will result in a collection warrant/lien being issued and possible garnishment of future wages. Until the debt is satisfied, MDES may intercept your State Income Tax Refund or your Federal Tax Refund. The state will also offset future unemployment benefits to be applied to your overpayment. Interest will accrue at the rate of 1% per month on any unpaid balance.

And for those who would rather keep it legitimate, Mississippi does offer three key rehabilitation programs for people in need of new skills to become gainfully employed.

Drive-thru job fairs: A unique, proactive, employment assistance resource for the unemployed, employers, and communities of Mississippi.
ReStart Mississippi: An online system assisting businesses transitioning employees who were separated from the workplace due to COVID-19 back into the workforce.
Employment and Workforce Innovation and Opportunity Act (WIOA) services: available on-line and through the system of WIN Job Centers throughout the state.