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I-Team: Unemployment compensation fraud on the rise

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WILKES-BARRE, LUZERNE COUNTY (WBRE/WYOU-TV) — A warning tonight from Pennsylvania state officials regarding fraud that is showing up in our region. It deals with unemployment compensation, and you don’t have to be unemployed to be a victim. Law enforcement officials say is connected to the pandemic.

Investigators say the scammers are using stolen personal information to claim unemployment compensation benefits from people all over the country, including here in Pennsylvania. The victims of the fraud are learning about the scam in recent months, when they receive tax forms from Pennsylvania saying they had received unemployment benefits when it fact, they were never out of work.

“Of course my biggest question really is how is it conceivable that somebody was able to get throguh to the Labor Departrment and submit unemployment under my name?” said Steven, a fraud victim.

Steven, from Columbia County, received a debit card for $16,000 in unemplyment benefits last summer, although he was never unemployed.

He contacted the state department of labor and industry and thought it was cleared up.

He learned differently when he recieved a 1099-G Tax Form from the state.

Federal,state and local law enforcment officials say this type of fraud is taking place across nation and Pennsylvania is not immune to the fraud. They say it ramped up when the COVID-19 pandemic hit last spring.

“We have over 50,000 fraud claims just in Pennsylvania alone. You have to understand the department of labor and industry only has 15 staffers dedicated to fraudulent cases, so that’s overwhelming,” said Senator John Yudichak (I) 14th District.

Senator Yudichak says that has to change. Victims are only learning about the fraud after they receive the 1099-Gtax form from the department of labor and industry.

Somehow the con artists got their personal information and cashed in.

“I can’t fathom how it would actually get through labor department and being approved for $16,000,” said Steven.

A spokesperson for the department tells the I-team:

“We are working with our law enforcement partners to address the fraud. We also hired a company that specializes in identity confirmation to help spotlight fraud.”

Sarah Desantis, press secretary of PA dept. Of Labor and Industry.

People who received a 1099-G form saying they had received unemployment benefits are concerned about their tax liability, certified public accountants Karen and Michelle Hazleton advise people to go to the Department of Labor website and to report the fraud.

“So fill out the form submit your information that I didn’t file for a thing I didn’t get any of this money. The IRS’s standpoint on this just file your taxes you actually didn’t get that form you didn’t receive unemployment compensation and a corrected form will get from the labor and industry,” said CPA Michelle Hazleton.

Senator Yudichak says the Dept. of Labor and Indsutry is simply overwhelmed.

“Already we have arrested 26 individuals involved in over $2.5 million recovered. Those who are taking advantage of people during the pandemic during this crisis,” said Sen. John Yudichak.

Senator Yudichak and many of his colleagues say that has to change. Budget hearings are underway in Harrisburg this week and there are calls for more funding for the Department of Labor and Industry.

If you know of individuals who are collecting UC benefits illegally, including people who are working and not reporting their wages for PA UC benefit purposes; or people who cannot work due to an illness, disability or incarceration, complete and submit the Unemployment Claims Fraud Form.

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