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State Catches at Least $100 Million in Bogus Jobless Claims

Scott Olson, Getty Images

New Jersey’s new anti-fraud unit says it’s caught $100 million in fraudulent unemployment claims just over the past year. Worse yet, State Labor Commissioner Harold Wirths says that’s a very, very conservative estimate.According to the AP, Harold Wirths told lawmakers that the new unit, led by a former FBI agent, stopped more than 2,000 false claims per week last year. Some were even filed overseas.

The State Department of Labor is using new hire directories to determine if those receiving benefits have returned to work. Benefits are stopped when a match is found, and payments don’t resume unless the claimant calls the state to explain. “As you can imagine, most of them don’t bother to make the call,” says Wirths. “They know they’ve been caught.”

New software is helping the unit to identify claims filed from outside the country, including more than 1,000 claims over a three-week period from Internet addresses in South America.

The state Labor Department will soon begin another program to stop claims made through stolen identities.

Employers and workers contribute to the state’s unemployment fund, meant to provide a safety net for workers who lose their job. The fund was completely depleted as of March 2009 and has an outstanding balance of $880 million. Wirths estimated the fund will be replenished by May 2014.

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