A large number of first-time claims for unemployment benefits filed last week in Colorado are suspected of being fraudulent, the state’s Department of Labor and Employment said Friday.
An investigation found that nearly a third of new Pandemic Unemployment Assistance claims filed last week, or about 5,600, are likely fake. The labor department stopped paying about 2,800 of them, which would have resulted in $34 million in payments because applicants were allowed to claim they had been impacted by the coronavirus since February.
The remainder of the questionable claims are still being investigated. The agency has been working with local law enforcement, the FBI and the Secret Service to further identify the fraud. The labor department shared fraud data only from the past week’s claims, saying that the investigation was ongoing.
Cher Haavind, the labor department’s deputy executive director, said the scheme involves people using stolen personal identification information to file claims in multiple states under the federal Pandemic Unemployment Assistance program. “Because of the eligibility factors within that program, it does lend itself to a higher incidence of fraud,” she said.
Haavind declined to go into detail about what the fraudsters did because she did not want to tip others off on how it could be done. But she said this only impacted the federal program that is paying out $600 a week to self-employed people, independent contractors and gig workers. Pandemic Unemployment Assistance was funded through the CARES Act to give this group of workers some relief since they do not qualify for regular state unemployment benefits.
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