PORTSMOUTH, Va. (WAVY) – A hundred million dollars here, a hundred million dollars there, and pretty soon you’re talking real money. It’s an old joke, but it’s no laughing matter when it involves criminals stealing from the Virginia unemployment system.
For thousands in Hampton Roads who’ve lost their jobs to the pandemic, it’s been a painful pattern of filing for unemployment, waiting, wondering and then waiting some more.
Meanwhile, others are getting paid by getting over on the system. Unemployment fraud takes money away from workers and jacks up costs for employers.
In many cases it involves a double-crime of stealing someone’s identity and stealing from the state government.
A man we will call “Robert” tried to file for unemployment on June 30. “And (Virginia Employment Commission) said my information was already being used. They put a freeze on all the accounts that had my name on it.”
Robert couldn’t have already filed because he had just gotten out of jail after several months. Prior to that he had worked in hospitality and telemarketing, but by June his job was gone. The mystery then leads to the Ocean View section of Norfolk.
“(VEC) had me listed as working at Lionshead Barber Shop. And I never worked there before,” said Robert.
One of the owners said he had no one that matched Robert’s description filing a claim.
How did someone pass themselves off as Robert, while he was in jail?
“I’ve been gone for nine months. There’s no telling,” Robert said. “I don’t know how they got my information, really.”
“We’re aware of it and we are working with local, state and federal authorities to address these instances of identity theft,” said William Walton, Unemployment Insurance Director for the VEC.
Walton runs the fraud unit, and says historically about 3% of claims have been bogus. Since the pandemic began, VEC has paid more than one million claims totaling $7 billion. That means as much, if not more than $210 million wasted in pandemic unemployment fraud.
“It’s certainly a very large number and something that we take seriously,” Walton said.
State Senator Bill DeSteph (R-Virginia Beach) thinks it’s as high as 10%, or $700 million in fraudulent claims, “because whenever there’s opportunity like this criminals are going to prey on that opportunity.”
DeSteph and his staff have assisted hundreds of Virginians so far with their legitimate claims.
He says his constituents who own businesses have to check on claims to see if they’re legit. Each claim can lead to higher unemployment insurance costs for those employers. They are the taxpayers funding the program.
“I’ve had constituents call and say ‘hey, this is massive for me,’” DeSteph said. “Here’s a whole list of 30 people who never worked for me, and are claiming that they did and are collecting unemployment insurance, and now they’re saying this is what I owe and this is ridiculous.”
Earlier this month, VEC said it has already had 3,000 fraudulent claims reported and stopped more than $50 million from being paid out.
“We have been successful in stopping payment on those continued claims so that more and more money if any money goes out at all. We’ve stopped hundreds of claims before first payment was made,” Walton said.
Robert has a wife and four kids. Because of fraud, his own claim was put on hold.
“Being laid off from work and can’t get the unemployment, it is a struggle. Because bills are due.”
After 10 On Your Side gave Robert’s info to VEC, they have now taken the hold off of his account and he was able to file his claim on Tuesday. He’s now waiting to see if he gets approved.
The VEC has about 40 fraud investigators, and Walton wants to hire 30 more. DeSteph says he thinks it would probably take more like a total of 100 investigators to keep up – and he supports adding those positions to the VEC.
If you suspect unemployment insurance fraud, click here to report it to the Virginia Unemployment Commission.
Additional related links:
Norfolk woman gets nearly 5 years for defrauding the VEC
Secret Service investigates unemployment fraud in several states, including North Carolina