Ohio On The Hunt To Recover $465M In Unemployment Fraud

After nearly a year of dealing with massive fraud, Ohio is launching a multi-agency operation to search for the people who bilked the state out of hundreds of millions of dollars in unemployment claims.

Leaders say the probe will likely find scammers across Ohio and around the world.

David DeVillers, former U.S. Attorney for the Southern District of Ohio, is heading up the operation with the Ohio Department of Job and Family Services (ODJFS). The probe, which includes the FBI and other federal agencies, will investigate the thousands of fraudulent unemployment claims filed during the pandemic. 

DeVillers said the "peer-to-peer" communication among agencies will ultimately streamline investigations and speed up the process of recovering the estimated $465 million doled out to scammers. 

"I promise you that there are a lot of good, hardworking people that want to get this done and we will work and do everything we can with law enforcement to make sure that it's done," DeVillers said.

The latest numbers from ODJFS show the state paid out:

• $21 million to fraudulent claims through traditional unemployment;
• $444 million to fraudulent claims through the federal Pandemic Unemployment Assistance (PUA program);
• $457 million in non-fraudulent overpayments through traditional unemployment;
• $1.7 billion in non-fraudulent overpayments through (PUA).

PUA was created by the federal government in 2020 to allow part-time, self-employed and other workers to collect unemployment since they were not eligible for traditional unemployment insurance programs.

The state-mandated shut down of businesses last spring led to a large volume of unemployment compensation filings, putting a burden on Ohio's outdated system, prompting long lag times and a backlog of claims. ODJFS has since entered into a private-public partnership to update the system and create more guardrails toward preventing fraud online.

"Our unemployment program is in a much better position now than it was a year ago and we will continue to make it as efficient, reliable, and fraud-proof as possible. And to recover all the funds that we possibly can," said Matt Damschroder, ODJFS interim director.

DeVillers said his team will be able to analyze the data behind possible cases of fraud and put together a package to send back to law enforcement agencies. The former U.S. attorney explained there will be three ways for the state to recover money obtained by fraud: through financial institutions, civil forfeiture and criminal forfeiture.

The latter could take years to play out, from filing charges to going to court. The statute of limitations for such cases is five years, DeVillers said.

The collaboration with federal agencies can also help coordinate investigations into out-of-state offenders.

"What we're finding is that the most amount of fraud, the most amount of loss and claimants are dealing with both national and international fraudulent individuals and enterprises," DeVillers said. "Make no mistake, there is fraud within and just within the state of Ohio and we are working with state authorities to do that as well."

Ohio-based fraud will likely increase work for Franklin County Prosecutor Gary Tyack, DeVillers said, adding that the Ohio Prosecuting Attorneys Association has agreed to provide help when needed.

In regards to the non-fraudulent payments, ODJFS will soon send out notifications to people who received an overpayment. For some, this might be a letter in the mail and for others it could be an e-mail.

 Waivers will be available for those who received money due to agency or employer error, according to ODJFS

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