State employment agency hit in nationwide fraud scheme

SPRINGFIELD – The Illinois Department of Employment Security said Wednesday it has been affected by a nationwide fraud scheme involving the federal Pandemic Unemployment Assistance program.

That program, enacted as part of the federal CARES Act, provides 100 percent federally funded jobless benefits to independent contractors, gig workers and others who don't normally qualify for the traditional unemployment insurance program.

In a statement Wednesday, IDES said that program was designed hastily as the COVID-19 crisis was unfolding and that it did not include adequate safeguards to prevent abuse. That's because the program is designed for people who don't have an employer.

In traditional unemployment, the agency said, an employer would be able to challenge a claim by reporting that a claimant was still employed or had not lost work through no fault of their own.

IDES spokeswoman Rebecca Cisco said in an interview that the scheme involves filing unemployment claims using false identities and then attempting to have the payment method switched from the debit cards that people receive when they qualify for benefits to a direct deposit.

The agency said those behind the fraud probably obtained people's personal information through an earlier cyber hack or data breach such as the Equifax data breach of 2017.

IDES did not say how many fraudulent claims it has detected or how much money is involved, but it did say it is cooperating with both local and federal law enforcement agencies to track down and prosecute the individuals behind the scheme.

Gov. J.B. Pritzker addressed the fraud scheme during a news conference Wednesday in Chicago, saying the scheme has affected nearly every state unemployment program in the nation.

“If you received a debit card in the mail, do not activate it,” Pritzker said. “It's also highly recommended that you check your credit report for possible suspicious activity. Again, this is a problem being experienced all across the country right now because the national program was poorly designed and susceptible to fraud.”

People who believe a fraudulent claim has been filed in their name are urged to call IDES immediately at 1-800-814-0513. When prompted, select the English or Spanish language option, then select option 1 for claimants and option 5 to report identity theft.

Information about identifying and reporting identity theft is available on the Federal Trade Commission's website, www.ftc.gov.