State audit finds billions in unemployment fraud

State audit finds billions in unemployment fraud

Capitol News Illinois
[email protected]

SPRINGFIELD – A state audit released Thursday found nearly $2 billion in federal money intended to help unemployed Illinoisans during the pandemic was lost to fraudulent claims in Illinois.

The Illinois Department of Employment Security blamed “insufficient and flawed federal guidance” and a lack of controls on a hastily constructed program put together by the Trump administration.

The federally-funded Pandemic Unemployment Assistance program provided up to 39 weeks of benefits for unemployed individuals who ran out of regular unemployment benefits and for self-employed individuals, gig workers and others not eligible for regular unemployment.

The report released Thursday by Auditor General Frank Mautino covered much of the life of the program, July 2020 through June 2021.

In the early days of the pandemic, amid business shutdowns and high unemployment, states struggled under a crush of claims from those laid off during those shutdowns. Amid this volume of claims, IDES was forced to try to weed out the fraudulent claims while under pressure to get money into the hands of the recently unemployed.

The Pritzker administration has said the PUA program was designed hastily and does not give employers an opportunity to challenge fraudulent claims because the type of workers applying for benefits do not technically have employers. The PUA program also eliminated existing controls, including income and employment verification, according to a statement by IDES.

Much of the fraud, up to $163 billion estimated nationwide, involved identity theft.

Scammers filed unemployment claims using false identities and then had the payment method switched from the debit cards that people receive when they qualify for benefits to direct deposit into an account accessible by them.

The audit found that, of the $3.6 billion in PUA paid out from July 2020 through June 2021, nearly $1.9 billion was found to be fraudulent, mostly due to identity theft.

“Overpayments associated with identity theft and traditional fraud within the PUA program was unprecedented and resulted in fraudsters using highly sophisticated techniques to take advantage of the current economic condition created by the COVID-19 pandemic,” the audit stated.

The audit found IDES:

Failed to implement general information technology controls over the Pandemic Unemployment Assistance.
Failed to maintain accurate and complete pandemic unemployment assistance claimant data.
Failed to perform timely cash reconciliations.

IDES responded that the system used to manage the PUA program is independent of the system used to manage regular unemployment benefits. From the beginning of the pandemic in March 2020 through the end of 2021, IDES stopped $40 billion in fraudulent payments from both state and federal programs, according to the agency’s statement.

Republicans are calling for hearings related to IDES’ handling of the programs and, specifically, whether the agency failed to follow federal recommendations for fraud prevention tools made available before the pandemic.

“The Pritzker administration and IDES have refused to disclose the extent to which fraud affected our unemployment system and this audit makes abundantly clear why,” said Rep. Tim Butler, R-Springfield, said in a statement. “The loss of nearly $2 billion, more than half the funds for the PUA program, displays an unprecedented level of negligence by the administration and IDES management. Blaming the previous president’s administration is an unacceptable excuse and we need immediate hearings to get to the bottom of this failure.”

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government that is distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

Leave a Comment

Local News


Phony village workers try to rob woman in her home

by Bob Jaderberg From The Reporter A pair of men posing as Oak Lawn village employees attempted to rob a resident last week, according to police. While one man waited in a blue or gray full-sized van, the other reportedly told the elderly resident who lives in the 9100 block of Major Avenue that they…


Accused drunken driver allegedly flees crash scene

Orland Park police arrested Marvin A. Bay-Saquic, 24, of Orland Park, at 6:51 a.m. Jan. 22 and charged him with driving under the influence (DUI), two counts of leaving the scene of an accident, failure to yield at an intersection, driving without a license and operating an uninsured motor vehicle after he allegedly caused a…


Purse thief suspect charged

by Kevin Olsen staff reporter A 23-year-old Alsip man was arrested on Saturday in Palos Park and charged with strong-arm robbery of a woman’s purse in the Jewel-Osco parking lot on Jan. 26. Patrick Sullivan was subsequently charged with similar thefts and robberies in Palos Heights, Oak Lawn and Hickory Hills. Sullivan was charged with…


Accused drunken driver allegedly turns left on red

Palos Heights police arrested Michael D. Palacz, 21, of Bur-bank, at 12:40 a.m. Jan. 31 and charged him with driving under the influence (DUI) of alcohol and red light violation after he allegedly turned left at a red light at Harlem Avenue and College Drive, police said. His court date is Feb. 23 at the…


Accused drugged driver allegedly drives into tree

Orland Park police arrested Vincent L. Benvenuto, 21, of Orland Park, and charged him with driving under the influence (DUI) of drugs, unlawful possession of a controlled substance and possession of drug paraphernalia at 10:46 a.m. Jan. 13 after he allegedly drove off the road and hit a tree in the 8300 block of 135th…


Accused burglar arrested

Palos Heights police arrested Kurt R. Westergren, 28, of Oak Forest, at 7:45 p.m. Jan. 25 and charged him with burglary after he was stopped by a custodian as he was allegedly attempting to break into a computer lab of a building in the 6600 block of Highland Drive, police said. It was later determined…


Woman charged with DUI

Palos Heights police arrested Lauren M. Gelecke, 26, of Alsip, at 1:07 a.m. Jan. 10 and charged her with driving under the influence (DUI) of alcohol and disobeying a traffic control device after she was stopped in the 6100 block of West College Drive, police said. Her court date is Jan. 29 at the Cook…


Palos Fire Dist. urges Palos Park require sprinklers in new homes

by Kevin Olsen staff reporter The Palos Park Village Council will decide in the coming months if it will adopt a new life-safety code that will require new construction of single- and two-family residences to have an interior sprinkler system. Palos Fire Protection District Chief Steve Carr on Jan. 11 outlined to the council the…


Teen charged with liquor after crash into boulder

Orland Park police arrested John J. Mulcahy 19, of Orland Park, at 11 p.m. Dec. 23 and charged him with possession and consumption of liquor by a minor, failure to reduce speed to avoid an accident, operating an uninsured motor vehicle and possession of cannabis after he lost control of his car and smashed into…

Accused drunken driver charged in fatal crash

by Meg Sullivan staff reporter An Orland Park man was charged with reckless homicide and aggravated driving under the influence (DUI) in a car crash last week that killed his friend, police said. Nick Sord, 22, crashed his car at around 4:20 a.m. last Thursday morning at 147th Street and Oak Park Avenue in unincorporated…


DVN JCs Restoration House Ad

Football: Previously winless Sandburg takes down defending champ Lockport

By Randy Whalen Correspondent A season ago, Sandburg turned its season around after a big loss to Lockport. This year, the Eagles hope their season has turned around after a big win over the Porters. Sandburg was winless coming into the SouthWest Suburban Blue matchup against the defending Class 8A state champions, but pummeled the…

Martin Hopkins, a 2009 St. Rita graduate, will lead the school's football program beginning next season. Supplied photo

Area sports roundup: No drama here, St. Rita grad Hopkins named Mustangs football coach

By Jeff Vorva Staff writer There will be no drama waiting to see who the will coach St. Rita’s football team in 2023. Even though there are four weeks to go in the 2022 regular season, the school last week named Martin Hopkins the successor to Todd Kuska. Kuska, in his 25th season as the…


Football: Evergreen Park edges Reavis in SSC Red

By Steve Millar Correspondent The back-and-forth battle waged against Reavis in Week 5 was the kind of game for which Evergreen Park prepares. It provided the Mustangs a chance to test how they would respond in an intense situation. They passed the test. “Resilience was the key,” Evergreen Park coach Jerry Verde said after the…

Lyons’ James Georgelos goes in for a tackle of York’s Brian Filosa. Photo by Steve Metsch

Football: York hands Lyons first loss of season

By Steve Metsch Correspondent Lyons’ bid for a fifth win and to essentially clinch a playoff spot was put on hold by York and junior running back Jake Melion. Melion, thrust into the RB1 role because of an injury to starter Kelly Watson, ran for three touchdowns in a 27-14 win for the Dukes. Lions…

regional top school palos heights

Palos 118’s West Elementary named National Blue Ribbon School

Palos West Elementary School in Palos Consolidated School District 118 has been named a National Blue Ribbon School award winner by the U.S. Department of Education. U.S. Secretary of Education Miguel Cardona made the announcement on September 16. “This is a moment of extreme pride for us here in District 118,” said Supt. Dr. Anthony…

regional ppwc

Palos Park Woman’s Club turns 120

The Palos Park Woman’s Club officially turned 120 years old on August 21, 2022. A celebration was held on that day at the Palos Park Rec Center with approximately 100 people in attendance including members, local dignitaries, family and friends. The Village of Palos Park recently proclaimed August 21 through September 17 as Palos Park…

Northwestern College Summer Quarter Nursing graduates hold lanterns during their Pinning Ceremony, symbolizing the passing of the flame from the founder of professional nursing, Florence Nightingale. (Supplied photo)

Northwestern College holds summer pinning ceremony

Northwestern College’s Violet L. Schumacher School of Nursing held a Pinning Ceremony for its Summer Quarter Nursing graduates on September 8. The ceremony was conducted at the Oak Lawn Public Library’s lower-level conference room, a new location following the college’s recent move from Bridgeview to Oak Lawn. The traditional ceremony marks the formal induction of…

dvn community calendar

Join the Polish American Cultural Club Meetings of the Polish American Cultural Club are held on the first Thursday of each month at 7 p.m. at American Legion Post 1941, 900 S. La Grange Road, La Grange. Dues are $20 per year for individual membership and $35 for a family membership. The mission of our…

MVCC Halloween 5k 2015

9th annual Halloween run at Moraine Valley

Grab a costume, dress up the kids and head to the ninth annual Halloween 5K run/walk and Kid’s Dash on Saturday, Oct. 29, 9 a.m., at Moraine Valley Community College, 9000 W. College Parkway, Palos Hills. Participants can walk or run the officially timed 5K (3.1 mile) path throughout campus. The Kid’s Dash will start…

Stagg football players get ready to take on Lincoln-Way West on Friday night. Photo by Jeff Vorva

Pigskin Wrap: Lincoln-Way West blanks Stagg as Chargers go 0-for-Lincoln-Way

By Jeff Vorva Staff Writer Stagg had just been beaten 36-0 by Lincoln-Way West in a SouthWest Suburban Red matchup in Palos Hills. It was the third consecutive game against a Lincoln-Way team. It was the third consecutive loss. And in this unholy trinity of games, the Chargers were outscored 126-3. Coach Colt Nero is…

DVN First United Realtors House Ad
CRR NH Farmers Insurance Cavoto House Ad