The Minnesota Office of the Legislative Auditor released a report Wednesday showing how potential cases of unemployment fraud have far exceeded the amount of action being taken to stop it.
According to the report, the public sent the unemployment insurance (UI) division of the Minnesota Department of Employment and Economic Development (DEED) almost 24,000 cases of alleged fraud throughout the 2021 fiscal year. Many of the cases were reportedly “imposters” applying for unemployment benefits with a stolen identity.
Although DEED suspended payments on 2,500 suspicious accounts in just one month with its new “screening processes,” it has only managed to pass along 44 cases to law enforcement in the last five years. The report believes DEED focuses more on “preventing the loss of program dollars by imposters and hijackers than on investigating those individuals.”
Upon presenting these findings, the report recommended that DEED reevaluate its processes for referring fraud cases to the appropriate investigative body. It also asked DEED to formally request “additional coordination and resources” from the inspector general’s office of the U.S. Department of Labor to adequately fight unemployment fraud.
“While DEED uses a variety of processes to help prevent and detect the use of stolen identities in the UI program, it has not measured the efficacy of those processes or the extent to which they may affect timely payments to applicants,” the report said.
In a Wednesday statement, Rep. Rod Hamilton of Mountain Lake explained that he found the report’s findings “very troubling.”
“Fraud is a crime and DEED should treat it as such in every instance where an imposter is trying to scam the system,” he said.
Hamilton, the lead Republican on the Minnesota House’s Workforce and Business Development Committee, also called on lawmakers — and perhaps those on the committee in particular — to probe DEED’s handling of alleged fraud.
“It’s clear lawmakers need to review how DEED is handling fraud within the UI program to make sure criminals are being punished and taxpayer dollars are being protected,” he said.