Michigan paid up to $8.5B in fraudulent unemployment claims, report shows

The state of Michigan paid up $8.5 billion in potentially fraudulent claims from the beginning of the pandemic in 2020 to September of this year, according to a report released Wednesday. 

According to an audit for the state’s Unemployment Insurance Agency (UIA) carried out by the firm Deloitte, between March 2020 and September 2021, the state paid approximately $8.4-8.51 billion in possibly fraudulent claims. 

The report also found that out of $52.2 billion in attempted fraudulent claims, the UAI prevented the release of $43.7 billion dollars to fraudsters.

However, they did not succeed in stopping bad actors from retrieving the remaining amount, according to the firm. 

“It’s extremely disheartening that bad actors have defrauded the much-needed benefits intended for hard-working Michiganders and the scale of their actions is stunning,” said Julia Dale, the director of the UIA, in a statement.

Following the report’s findings, Gov. Gretchen Whitmer (D) rolled out two executive orders on Wednesday, creating the Unemployment Insurance Fraud Response Team to investigate possible cases of fraud, and implementing more robust measures and technologies to reclaim stolen money.

“It’s extremely important that we continue to push back on bad actors who look to take advantage of a vital safety net resource for out-of-work Michiganders,” said Whitmer in a statement.

“While we are seeing increased success in identifying and stopping fraudulent claims, we cannot let up. We owe it to workers to make sure this jobs resource is available when they need it the most.”

When the coronavirus pandemic first hit the U.S., it triggered layoffs and a surge in unemployment claims. 

According to the report, Michigan recorded 77 times more claims per week compared to an average week before the pandemic. In the spring of 2020, the high reached 388,000 reported in a single week, compared to just 5,000 claims before the pandemic, and a previous all-time high of 77,000 claims in one week during the Great Recession. 

Critics of the Democratic governor took to Twitter to ding her over the firm’s findings Wednesday. 

“This is yet another reason why Whitmer’s administration can’t be trusted to provide the help needed for people in a crisis,” said Gustavo Portela, the communications director for the Michigan GOP, in a statement. “We’ll replace her next year with a Republican governor who won’t let fraudsters walk away with billions of taxpayer dollars.”

NEW Michigan’s Unemployment Insurance Agency loses more than $8.5 billion in fraudulent claims https://t.co/pgenyxERsE pic.twitter.com/Az1YUizhRR

— Michigan GOP (@MIGOP) December 29, 2021