Report: State paid $151K in bogus jobless claims

The Louisiana Workforce Commission paid out more than $151,000 for more than four dozen seemingly fraudulent pandemic unemployment claims in 2020, according to the Louisiana Legislative Auditor.

LLA Mike Waguespack issued an investigative audit report last week in response to complaints about pandemic unemployment fraudsters that uncovered dozens of claims filed from the same internet protocol address that were directed to the same bank accounts.

Auditors identified 49 claims totaling $151,907 filed between May 15, 2020 and October 14, 2020 that appear to be fabricated, though individuals identified by initials in the report denied wrongdoing.

"The majority of the claimants' names and Social Security numbers did not correspond to a Louisiana
driver's license/identification card, and no Louisiana wages had been reported for the majority of these claims," auditors wrote. "LWC records show that these claimants used the same and/or similar mailing addresses and that their LWC accounts were accessed from the same Internet Protocol addresses to change their names, contact information, and bank account information."

The 43 claims were accessed within minutes of each other from the same internet address an individual identified as A.B. used to direct $53,099 in benefits to at least two bank accounts held by his family members.

Another 25 claimants received benefits totaling $79,891 on debit cards used to withdraw cash at the same
locations and times A.B. used a debit card to withdraw cash.

The alleged scam involved emergency federal benefits of $600 per week included in the CARES Act.

"We searched LWC's database to identify additional claimants who used the same mailing addresses, IP addresses, and bank accounts as the 49 claimants," according to the report. "We found that C.D. filed an unemployment application on March 19, 2020, and was the first claimant to have benefits direct deposited to one of the common bank accounts. In addition, LWC records show that C.D.'s brother, A.B., submitted an unemployment application on April 9, 2020, and consistently accessed his LWC account from the same IP address as the other claimants."

Records showed A.B.'s girlfriend was the registered subscriber for the IP address, which was used to divert benefits to bank accounts held by A.B.'s sister, C.D., and A.B.'s cousin, E.F. The LLA report details the timeline of changes to the various LWC accounts to direct funds to a bank account in E.F.'s name, as well as to an account in C.D.'s name and another unrelated third party.

The report also outlined other links between A.B., C.D., and cash withdrawals from debit cards associated with the LWC accounts.

"For example, A.B.'s debit card and nine other debit cards were used on July 9, 2020, at the same location in Slidell, LA to withdraw cash totaling $4,580 from 6:18 a.m. to 6:31 a.m. The same nine debit cards and nine additional debit cards, were used to withdraw cash totaling $13,548 on July 14, 2020, at five different locations in Slidell, LA from 12:26 p.m. to 1:18 p.m. US Bank records show that the 23 debit cards were used to withdraw cash at ATM's totaling $74,475 from May 15, 2020 to July 22, 2020," according to the report.

A.B. told the LLA he lost his debit card and his LWC account was compromised, and could not recall if he used his sister's bank account or if he remembered helping anyone receive benefits through his sister's account.

The LLA recommended several ways the LWC can improve security to prevent similar scams in the future, and LWC Secretary Ava Cates responded to the report in a letter to Waguespack on Dec. 8.

Cates highlighted the high volume of claims during the pandemic — peaking at 732,000 a week in April 2020 — as well as federal guidance to prohibit requiring proof of identity, and the agency's "accurate payment rate of over 95%."

"Nearly all of the claims identified in the referenced reports are (federal pandemic) claims that were filed soon after the program was launched," Cates wrote. "None of these individuals would have been eligible for or ever received regular state unemployment insurance benefits."