By: Mark Glennon*
Nearly a year after Illinois lawmakers requested an audit by the Illinois Department of Employment Security of fraudulent unemployment claims and a tabulation of losses during the pandemic, nothing has come forth.
The losses are undoubtedly horrendous. National total losses from unemployment fraud and mistakes during the pandemic were estimated by the U.S. Labor Department back in March 2021 to be $63 billion and counting.
That makes it potentially the biggest financial scam in U.S. history, as we explained then.
Illinois’ share is unknown, but “if the amount tracks with national estimates, it could involve billions of dollars,” as the Chicago Tribune reported at the time.
Some other states are also dragging their feet on quantifying losses, but now the U.S. Labor Department is taking the heat off. It recently issued new guidance that more broadly excuses states from an obligation to recover improper payments and send the money back to the Treasury Department. “The department created new blanket waivers that excuse states from tracking down the money in entire categories of cases, like those in which people were paid unemployment despite saying they were not available to work,” as reported by Route Fifty.
Some Congressional Republicans have howled, saying the Labor Department lets states “off the hook for due diligence and fact-finding for large volumes of suspicious unemployment claims potentially involving billions of fraudulently obtained taxpayer dollars.” A Labor Department spokesperson responded by saying the department created the blanket waivers in response to states’ requests for more flexibility. “We were trying to eliminate some of the administrative complexity for states,” she said.
One consequence of the mess in Illinois’ unemployment system is that it received a qualified opinion from its independent auditor on its most recent financial statements, which is highly unusual. In his report, Illinois State Auditor Frank Mautino highlighted, “The system processing these claims had material weaknesses in the design and operation of internal control and we were unable to obtain sufficient appropriate audit evidence to determine or verify by alternative means whether accrued claims and certain other paid claims met eligibility requirements.”
“The auditor’s report suggests that Illinois outsourced its claims processing system which had material weaknesses,” wrote Truth in Accounting. “It is virtually unheard of for corporations to receive a qualified opinion as it can threaten the company’s value,” they added.
Honest unemployment claimants had nightmarish experiences collecting their money, as was widely reported throughout the pandemic in Illinois. Fraudsters, not so much, though we may never know the full scope of their success.
Let’s hope Illinois lawmakers keep pressing for an honest audit because the federal government apparently won’t be of much help.
*Mark Glennon is founder of Wirepoints.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
The number for Illinois starts with a “B” and even more pathetic is the fact that the State is paying interest on the fraud so regardless of what the number is you can start compounding it by the interest accrued. Complete and total malfeasance and misappropriation of taxpayer money. Whoever is running against Jabba in the election should HAMMER him on this.
We the citizens of Illinois demand a 100% audit, 100% full retrieval of all monies, all people prosecuted, any money laundering exposed to the public, fully paid back to the US Treasury.
Had you/we the citizens of Illinois acted sooner, and spearheaded a lawsuit against fraudulent claimants on behalf of The State (which refused to act on its own behalf), our case might be grandfathered in and entitled to discovery of records which the IDES is fudging its didies to keep hidden.
Now, it seems that the fraudulent claimants are being given safe harbor by the Federal government in order to protect States like Illinois from such litigation discovery.
“We the citizens” must acknowledge some personal responsibility for failing to act individually to clean up our own shithole regions of corrupt practices.
why in the world aren’t the republican gov candidates socken it to jb on the fraudulent/ incompetence @ ides? very little outrage in the press as well.
Dumb question, mostly I’m still confused– has jb actually officially lifted the work remotely indefinitely covid emergency order for our ides afscme heroes that have supposedly been doing such a productive job working from home while binge watching netflix?
You know it was bad in Illinois. My wife and I both received notices from IDES that we had filed for unemployment, although we had not. Another example of Illinois political malfeasance at the worst levels of all 50 states.
Just raise property taxes like $200 per home in the suburbs (midwest nice, they will not care), wash this under the table (bad press), …
This a brilliant tactic to prevent corrupt incestuous State agencies from discovery as a function of qui tam suits. Make it so there are no damages to recover…
“For example, the federal False Claims Act authorizes qui tam actions against parties who have defrauded the federal government. 31 U.S.C. § 3279 et seq. If successful, a relator in a False Claims Act qui tam action may receive up to 30% of the government’s award. ”
https://www.law.cornell.edu/wex/qui_tam_action
Illinois lawmakers pressing for a honest audit, ha ha are you kidding me there’s nothing, absolutely nothing honest about Springfield, what a joke.
Per media reports, even Chicago’s CPD Internal Affairs Commander Talley took two PP grants. Bet this won’t be investigated, and Talley gets yet another merit promotion too. Level of corruption here in Illinois is unacceptably normalized.
IDES is an incompetent agency totally by design. Where confusion reigns, corruption flourishes.
IDES is working exactly as those in charge have ordered.
Had fraud happen to a family member, notified IDES immediately, but they still made close to $7k of payments to the unknown claimant. Eighteen months later, they sent a letter saying that the payment was a fraudulent claim and threatened the family member that they would garnish wages unless repaid. Btw: not paying it
“Let’s hope Illinois lawmakers keep pressing for an honest audit because the federal government apparently won’t be of much help.”
I’d say there’s about as much a chance of Illinois trying to identify and recover fraudulent unemployment benefits as there has been, and is, of Illinois identifying and recovering fraudulent Medicaid and SNAP payments.
Which is to say, just about none at all.
Yeah, that does sound pretty goo-goo. Sorry.