Scammers pocket over $4B from State of Arizona
Having occurred since the start of the pandemic
PHOENIX, Ariz. (KYMA, KECY/AP) - Scammers have pocketed nearly 30% of the $16 billion in unemployment insurance payments sent out by the State of Arizona since the start of the coronavirus pandemic.
According to Arizona Department of Economic Security Director Michael Wisehart, most of the fraud happened in the first several months of the pandemic. He clarified that it mainly hit federally funded emergency unemployment insurance programs designed to help "gig workers" like Uber or Lyft drivers.
“I feel horrible for the taxpayer, for myself as a taxpayer, for all taxpayers, that this happened,” Wisehart said of the fraud loss. The benefits of these programs were legislated to help people who would normally not be eligible for governmental assistance.
Arizona has recovered $1.4 billion of the funds it had paid out, but is "still in the red" between $4.3 billion and $4.4 billion.
The Department of Economic Security (DES) believes most of that money is probably lost forever. DES officials blame out-of-state or overseas scammers who took advantage of the lack of identity verification early in the program, transferring those funds into alternate bank accounts.
“But I’ll tell you, I would be way more angry at me and us if this was into 2021 and it extended beyond the first two or three months of the pandemic where it was true chaos," added Wisehart.
