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Borrello Wants To See Unemployment Fraud Figures

State Sen. George Borrello, R-Sunset Bay, wants to know how many confirmed and suspected cases of unemployment fraud have happened in New York state over the past year.

Borrello noted a Sept. 13 Albany Times Union report showing the state Labor Department suspended certain verification protocols in order to expedite claims and clear backlogs. Labor Department officials have acknowledged 166,000 New Yorkers received overpayments totaling $145 million. However, the amount of money lost to fraudulent claims is unknown, as the agency has not answered media requests for the information.

“As we emerge from the pandemic, it is crucial that we have full transparency in all aspects of state operations that have been integral to our crisis response. Our unemployment insurance (UI) system clearly falls in that category,” Borrello said. “This crucial safety net is facing its own crisis right now, with its reserves depleted by a ‘perfect storm’ of overwhelming demand and insufficient security protocols as well as fraud and abuse. Greatly relaxed eligibility, combined with generous federal supplemental benefits, encouraged countless people to collect unemployment rather than work,” he said. “The extra stress these claims placed on the system resulted in benefit delays for truly needy New Yorkers.”

Assemblyman Andrew Goodell, R-Jamestown, pointed out recently on the Assembly floor that $130 million had been included in the recently enacted state budget to pay interest on a $4 billion federal unemployment loan the state took out last year. According to Bloomberg News, 2020 unemployment insurance tax rates ranged from 0.6% to 7.9%. This year, they will range from 2.1% to 9.9%, according to the state Labor Department website.

“I am hearing from small businesses in my district who did not lay off any employees in the past year, who have been shocked to receive unemployment insurance tax bills that have increased 200 percent or more,” Borrello said.

“It is incomprehensible that employers are being asked to fix this problem, which was caused by a once-in-a-century pandemic and made truly disastrous by bad policy decisions. New York employers and taxpayers deserve a full accounting of all the factors that led to this predicament, starting with how much of the fund’s resources have been expended to pay confirmed and suspected fraudulent claims. Other states have released this data and it’s time for New York to do the same.”

Numerous states have reported on the amount of funds they’ve lost to fraud and scams, including California, which confirmed it has lost over $11 billion in fraud and is investigating another $20 billion.

“In addition to policies that helped fuel a flood of claims, there has also been a well-documented surge in New York and states across the country in unemployment fraud, on a massive scale. There are countless reports of New Yorkers employed by school districts, state and local governments and companies having their identities stolen by thieves who used them to apply for benefits. Last month, one man from the Bronx was charged with submitting over 250 fraudulent unemployment benefit applications that resulted in the loss of more than $1.4 million. I was even a victim of UI fraud recently.”

Also on Tuesday, the state Labor Department released unemployment data for March. Chautauqua County’s unemployment rate ticked down in March to 7.4%, an eighth of a percentage point less than February and 2.2 percentage points less than January. New York State’s seasonally adjusted unemployment rate decreased from 8.9% in February to 8.5% in March 2021.

The unemployment rate decrease was not the result of more people working, as the number of employed county residents stayed at 47,900 from February to March. But, the unemployment rate decreased because there were 600 fewer people looking for work, which meant the number of unemployed decreased from 4,400 to 3,800 from February to March.

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