DENVER | More than 75% of Colorado claims for a federal unemployment assistance program for self-employed workers and independent contractors since July 18 were determined to be fraudulent, state labor department officials said Thursday.
Department officials said revisions to initial claims under the Pandemic Unemployment Assistance program for the weeks of July 18 to Aug. 22 found that 14,292 of a total 62,498 initial claims approved were legitimate, The Denver Post reported.
Officials estimate they’ve received as many as 50,000 fraudulent claims in the two weeks since Aug. 22.
“We have prevented $750 million to $1 billion in improper unemployment insurance payments going out the door,” said Cher Haavind, deputy director of the Colorado Department of Labor and Employment. Some $40 million in federal funds may have been obtained by people using stolen identities, she said.
Congress authorized the Pandemic Unemployment Assistance program earlier this year to help people not normally eligible to receive unemployment benefits, including independent contractors.
Initial claims in Colorado peaked at more than 40,000 the week of April 25, dropped to more than 4,700 on July 11, then began growing again. Ryan Gedney, a senior department economist, said just 2,216 of 16,417 initial claims filed the week of Aug. 22 were legitimate.
Jeff Fitzgerald, who heads Colorado’s unemployment insurance program, said recent enhancements in fraud detection have been highly effective. He declined to elaborate on those measures.
Fraudulent claims came from within and outside of Colorado, Fitzgerald said, adding that the department is working with local and federal law enforcement to investigate. Many states, including California, face the same problem.
Under regular unemployment insurance programs, employers report wage data quarterly or monthly to the state. Someone who files a claim for a week they are ineligible based on that information are flagged. The federal program relies on the statements of those filing claims, with states responsible for verifying their veracity.