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Benefits scam could delay some Michigan filers unemployment

Leonard N. Fleming
The Detroit News

Michigan Unemployment Insurance Agency officials on Wednesday warned that imposters are trying to file false claims using other's information to get benefits during the COVID-19 crisis.

Michigan's Unemployment Insurance Agency (UIA) website

The result: some in Michigan filing for unemployment have found "Stop Payment" notices on their accounts and are being told that additional instructions to verify identity and authenticate claim eligibility are being sent via the postal service. The instructions indicate how to go into the accounts online and verify the information.

"Certain financial institutions may also place a hold on a customer's account if it believes there is suspicious activity," the alert from the UIA said. "Customers should contact their institution directly if this occurs."

The UIA, Michigan State Police Cyber Command, and Department of Technology Management and Budget Cybersecurity are working with the United States Secret Service to track an international criminal ring engaging in fraud activity.

Some in Michigan filing for unemployment have found "Stop Payment" notices on their accounts and are being told that additional instructions to verify identity and authenticate claim eligibility are being sent via the postal service.

No personal data from claimants has been stolen from the state's UIA, officials said.

State officials said the Secret Service recently issued a national alert "regarding an international criminal ring exploiting the COVID-19 crisis to commit large-scale fraud against state unemployment programs." It said states targeted include Washington, North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida.

"There is a rise in unlawful unemployment claims across the nation and unfortunately, criminals are taking advantage of this global pandemic," said Steve Gray, Michigan's UIA director. "Michiganders who suspect an imposter claim has been filed in their name should contact the UIA immediately."

"We are working with law enforcement to identify and prevent scammers from accessing the system and will work to ensure all unemployment benefits are sent to the Michigan workers that deserve them."

The UIA said when it becomes aware of potentially malicious claims, it takes "quick action" to temporarily suspend certain payments to prevent fraud.

Expanded benefits under the federal Pandemic Unemployment Assistance program, part of the federal CARES act, has spurred "increased activity among criminals, particularly those posing as self-employed workers or independent contractors" to gain illegal benefits, the UIA said.

Imposter claims are filed using previously stolen or fraudulent personal information, the state said.

Earlier this month, Gov. Gretchen Whitmer issued an executive order to expedite unemployment benefits "for tens of thousands" of Michigan residents after a slow start in distributing the benefits after the coronavirus crisis began.

​Steve Gray, director of the State of Michigan Unemployment Insurance Agency

Michigan has experienced record levels of unemployment filings in recent weeks after the state effectively shut down the economy in March to prevent the spread of Covid-19.

More than 1.2 million people in Michigan filed for unemployment from March 15 through April 25, according to state data.

The scam follows problems related to the state's surge in unemployment claims amid the stay-at-home order.

As a result, tens of thousands of people had trouble trying to get benefits because the unemployment website was swamped. The director of Michigan's Unemployment Insurance Agency apologized last month because areas of the website wasn't "as user friendly as they could be."

Earlier this month, the state said about 92% of eligible unemployment claimants in Michigan have received part of the $5.6 billion in unemployment paid between March 15 and May 13.