LIMA — The Ohio Department of Job and Family Services is conducting an expansive investigation into more than 250,000 Pandemic Unemployment Assistance claims the agency believes may be fraudulent, a process which leaves thousands of out-of-work Ohioans who have legitimate PUA claims in limbo as their payments are temporarily withheld.
The investigation was launched on July 10 after ODJFS was notified by Deloitte, the consulting firm responsible for creating Ohio’s PUA system and processing those claims, of suspicious activity related to bank routing numbers from several popular mobile banking services.
The agency has noticed other suspicious activity too. About 1,700 PUA claims were tied to the names of deceased individuals, according to ODFJS spokesperson Bret Crow, and ODJFS has identified three email addresses attached to 100 out-of-state PUA claims.
Claims tied to fraudulent IP addresses and bank routing numbers, as well as those with invalid email addresses, were also flagged as suspicious.
Applicants whose claims were flagged are required to undergo a second, more comprehensive round of verification before their claims will be released and paid.
All told, ODJFS put payments on hold for some 270,000 claims.
As of Tuesday, ODJFS has cleared 19,000 Ohioans whose PUA claims were swept up in the investigation. That number is expected to grow as the agency commits more staff to investigate suspicious claims and verify the identities of those who believe their accounts were flagged in error.
But ODJFS estimates 95% of the claims under investigation are fraudulent, accounting for about $200 million in benefits per week.
“I’m deeply sorry for all of the challenges this has presented for those who are caught up in this fraud scheme and whose claims are legitimate,” ODJFS Director Kimberly Hall told reporters on Tuesday.
Since May, nearly 503,000 Ohioans have received PUA benefits.
The program, which is federally funded, was established by Congress in the CARES Act to ensure that Americans who typically do not qualify for state unemployment insurance had access to those benefits during pandemic.
Hall told reporters on Tuesday that the catch-all nature of the program — which is open to independent contractors, gig workers and Ohioans who didn’t earn enough to qualify for traditional unemployment insurance — makes the system more susceptible to fraud.
For a traditional unemployment insurance claim, ODJFS verifies an applicant’s work history and wages with their previous employer before approving the claim. PUA applicants are only required to submit their 1099 tax form as proof of employment and earnings.
And Hall said Ohio’s PUA system was not originally built to identify some signs of fraud, like duplicate claims using different email addresses or bank account numbers, because the system was put together in 26 days.
“It will have vulnerabilities that you discover over time,” Hall said.
Similar PUA fraud investigations are underway in about a dozen states.