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AUGUSTA, Maine — Scammers who targeted Maine’s overwhelmed unemployment system may have filed thousands of fraudulent unemployment insurance claims worth millions of dollars, officials said Wednesday.
Unemployment claims made by people impersonating others have increased across the country during the coronavirus pandemic that has stressed state systems for processing benefits. The state announced steps on Tuesday to combat fraud that will result in slower processing times.
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Maine’s labor department quantified the reported fraud for the first time on Wednesday, saying in a release that it is investigating 1,000 reports of unemployment claims made by imposters and has stopped more than 2,200 claims before they could be processed. The state said claims paid to imposters could total millions of dollars.
At a Wednesday news conference, Gov. Janet Mills called it an “organized crime” effort taking advantage of a situation in which “every state is under pressure” to get benefits to people.
‘We’re going to do what we can to get to the bottom of it,” she said. “It is extraordinarily unfair.”
The rash of fraudulent claims looks to be recent, according to police in some of Maine’s largest cities. In Portland, all 60 claims the department has received were made in the last week, said city spokesperson Jessica Grondin. Portland had just one claim last year. An Augusta official reported no claims in March and April and 12 complaints involving 22 victims since May 16.
Imposter fraud typically occurs when criminals use stolen personal information leaked in previous data breaches of outside companies and organizations to place unemployment claims under a worker’s name. The labor department is investigating reported fraud with state and federal law enforcement agencies.
Employers often find out about these cases when they are notified of claims filed for workers who are still on the job. The Bangor Daily News, which has not laid off workers due to the pandemic, has had 14 current employees and four former employees affected by fraudulent claims, Todd Benoit, the newspaper’s president, said on Wednesday.
Fraudsters are targeting an unemployment program that has been beefed up due to the virus. The average weekly benefit in March was $343, but that does not include an additional $600 weekly benefits unemployed individuals could receive through the $2.2 trillion stimulus passed by Congress in March.
Fake claims are expected to increase, the labor department said on Wednesday. It is reinstating a processing system that can take anywhere from 10 to 14 days after expediting claims to handle increased demand. It is also blocking web addresses linked to fraud, making other changes to help detect it and working with financial institutions to identify suspicious accounts.
BDN writer Michael Shepherd contributed to this report.