Maryland officials discover $501 million unemployment fraud scheme

Maryland officials have discovered a massive unemployment fraud scheme that resulted in $501 million worth of fraudulent claims, Gov. Larry Hogan (R) announced at a press conference Wednesday. 

According to Hogan, more than 47,000 false claims were made using stolen identities and personal information acquired from previous data breaches. The governor said Maryland claimants’ personal information was not compromised during the scheme.

The state has been working on the investigation with the U.S. Attorney’s Office for the District of Maryland and the Office of Inspector General at the U.S. Department of Labor.

“Not only did we identify the fraud here in Maryland and save the taxpayers half a billion dollars. We also helped the federal authorities identify related fraudulent activity across the country,” Hogan said. 

Hogan said the state has processed $4.3 billion in federal unemployment insurance benefit payments to more than 489,000 residents of Maryland. 

“I can assure you that nothing is going to stop us from continuing to help struggling Marylanders get the assistance that they need during this crisis,” Hogan said.

Millions of people have applied for unemployment benefits since the start of the coronavirus pandemic, which has led to widespread closures and economic decline. The influx in claims has resulted in long wait times as well as the possibility of system glitches and fraud.

In May, the U.S. Secret Service announced that it had detected a large-scale foreign attack on the U.S. unemployment system that could have led to “potential losses in the hundreds of millions of dollars.”

Earlier this month, Texas asked thousands of people who had lost their jobs to return overpaid unemployment benefits. Officials quickly backtracked and said residents would be able to keep extra funds they received due to state errors.