Michigan paid $8.5B in fraudulent pandemic jobless claims

LANSING, Mich. (AP) — Michigan likely paid about $8.5 billion in fraudulent or improper jobless benefits over a 19-month period during the coronavirus pandemic, far more than previously estimated, according to a report released Wednesday by the state's unemployment agency.

The figure, provided by Deloitte & Touche, came more than a year after the firm said the agency expected fraud losses in the “hundreds of millions" of dollars. State auditors have since reported that the agency improperly paid $3.9 billion to claimants who were later deemed ineligible.

There is “some overlap” between those payments — made to self-employed and gig workers who began qualifying for federal aid because of the pandemic — and the overall $8.5 billion estimate, said Julia Dale, director of the Unemployment Insurance Agency.

“My initial reaction to seeing these numbers is one of outrage and certainly frustration," she told The Associated Press. “These are not the type of numbers that we had hoped to see or want to see.”

She added, however, that the state has been doing a much better job blocking fraud for more than a year.

The percentage of benefits paid involving likely imposter fraud was 0.46% last fiscal year, down from 9.7% between March 2020 and October 2020. The portion paid involving likely intentional misrepresentation fraud — apparently legitimate claimants who may apparently fabricate income-verification documents or knowingly fail to report information that would make them ineligible — was 0.11%, a drop from 20.1%.