Thousands Of Unemployment Claims Released From Fraud Probe, But Many More Still Held

Aug 11, 2020

The state of Ohio has released for payment around a fifth of the quarter of a million claims for non-traditional unemployment assistance that it was holding back as it checked them for fraud. But some of the real people caught up in that investigation found it was yet another challenge they’ve had to face during this pandemic.

Danielle Naab of northeast Ohio lost her job as a part-time independent contractor in March.

Like all those who didn’t qualify for traditional unemployment, she had to wait till May for the state to build the system that would allow them to be paid federally funded pandemic unemployment assistance, or PUA.

She was filing her weekly claim on July 15 and saw something odd.

“It said I had two pending fraud alerts. So at that point, I started to really -  you know, like what is this? Fraud?" Naab said. "So the next day, Monday, I called them and I probably waited a good two hours on hold that day before I even got a person. And from that point forward, it has just been chaos.”

Brendan Joyce was working in a restaurant in the Cleveland area when it was ordered shut down in March.

He also had to wait for the state to build the PUA system and had been getting paid since May, but had a similar experience when he signed on to file his weekly claim on July 15.

“There were two big red, all caps issues that said fraud. So when I went to click on the case number next to it, which is how you access information systems, there is no information there," Joyce said. "And so probably everyone else who was dealing with this, I freaked out.”

Naab and Joyce were among those whose claims were frozen by the state because of concerns over fraud that had hit unemployment agencies in other states.

Ohio Department of Job and Family Services Director Kim Hall said last month that this wasn’t a hack or a breach of the data in the system – it was simply an organized attempt at fraud by scammers using fake names, social security numbers or other information to take advantage of the new PUA system.

“It’s a tough situation that states are in on top of dealing with the volume that we already have in our unemployment space. Sifting through who’s genuine and not is certainly a challenge," Hall said.

ODJFS said 276,000 claims were flagged based on information from other states and the federal government.

The state considered 59,000 of those claims fraudulent from the start. Hall said another 155,000 of those claims that have valid, unduplicated email addresses are being asked to take extra steps to prove they’re real.

“We have issued fact finding notices for all of them this week, requiring them to answer six questions and provide additional documentation so we can verify their identity," Hall said.

It’s estimated those frozen accounts added up to about $200 billion in weekly benefits.

Danielle Naab said the state wanted a lot from her to prove she was a real person – and it took her two hours to upload it all from her phone.

“They're asking you to recertify basically with everything that you've said in the beginning. But they also want probably 15 pieces of documentation - I think they wanted a form of picture I.D., a Social Security card, a birth certificate. They want your taxes in the last two years," Naab said. "They want, I can't remember any of these documents. But there I think it said 15 when I finally sent in all of my information.”

Naab’s claim was among those recently released and she’s getting paid - but she says food stamp benefits for her and her son were also held during the investigation.

Naab said it’s the second major issue she’s had this year – she was among around two dozen people whose data was exposed for about an hour not long after the PUA system was launched. There’s a lawsuit that’s been filed against Deloitte, which built the state’s system, over that leak.

The holds were placed on accounts that paid to Metabank, which operates Green Dot and GoBank; Bancorp, which operates Chime, and the Cash App mobile payment service, among others. These are accounts often used by people who are reestablishing credit or need money quickly.

Brendan Joyce’s claim was released too and he’s getting paid. But he’s frustrated and angry at what he and others have gone through.

“This is profoundly cruel. This is a giant act of state violence," Joyce said. "At the same time, they haven't stopped evictions. They haven't canceled rent. They haven't made any of these systems easier.”

And Joyce said he feels the solution for many is to go back to work and risk getting sick, and for restaurant workers like him, the demand isn’t there.

ODJFS has paid $4.9 billion in PUA to more than 503,000 people, some of whom got PUA because they went through the process of applying for regular unemployment and were denied.