Louisiana probes new unemployment claims for fraud

Louisiana

BATON ROUGE, La. (AP) — A spike in new unemployment claims has prompted the Louisiana Workforce Commission to investigate what it describes as potentially fraudulent activity, officials said Wednesday.

The commission, in a news release, said more than 32,000 claims are being “rigorously reviewed for validity” and the agency has decided to halt payments for claims made after Nov. 5 until that review is complete.

Since the coronavirus pandemic began, the state agency has stopped more than 160,000 claims that are potentially fraudulent or possibly involve identity theft.

“Our office remains conscientious in detecting and combating fraud,” said Ava Dejoie, secretary of the Louisiana Workforce Commission in a news release. “We are tracking this data to identify any potential fraudulent claims that may have been filed. We apologize for any delay or inconvenience this issue may bring to our Louisiana families and workers, especially entering the holiday season.”

The state has amended claims data it previously submitted to the federal government until it can further review all the suspicious claims, the Louisiana Workforce Commission said. The agency noted that there’s been an increase in fraudulent activity regarding unemployment claims across the country.

As a result, all unemployment seekers may experience a delay in payment of benefits. All new claimants will receive an email requesting further identity verification.

“We monitor and review our systems on a daily basis as people committing the fraud constantly change their methods,” Dejoie said. “We work diligently with our security team and federal and state law enforcement to stay ahead of the fraud schemes.”

The decision comes after the state saw its new unemployment applications plummet one week after the unexpected spike, The Advocate reported. There were 9,320 new unemployment claims across the state for the week ending Nov. 21 — down from a surge of more than 43,000 new claims the previous week, records show.

Likewise, new applications for the federal Pandemic Unemployment Assistance program, which is mostly for independent contractors and gig workers, dropped to only 9,697 new claims from more than 39,500 one week before. Numbers for those continuing to receive unemployment benefits last week were not yet available; the ranks of those traditionally unemployed hovered around 91,000 two weeks ago.

New jobless applications had been on a mostly downward trend since late September.

The U.S. Department of Labor said an unexpected spike in new unemployment claims is one indicator of potential fraud in the program and laid out the process for determining explanations.

If there is evidence of fraud, the federal government brings in the Office of the Inspector General and other resources through the unemployment insurance integrity center.

“When that occurs, the department is immediately in contact with the state to assess the situation and work with the state to address it,” according to a Department of Labor spokesperson. “The Department is currently working with and supporting Louisiana’s and other states’ efforts to prevent, detect and recover fraudulent payments.”

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