Scammers, some overseas, have fleeced American workers out of more than $36 billion in emergency unemployment funds — a huge portion of the $900 billion that flooded into the economy as a result of the CARES coronavirus relief act passed in April.
CNBC reports that the supplemental federal unemployment program, passed as part of the CARES Act to give “gig workers” — those who work only part-time or rely on gig economy jobs with companies like Door Dash and Uber to pay the bills — access to hundreds of dollars in weekly unemployment benefits, ended up giving billions to scammers and fraudsters.
“The U.S. has pumped billions of dollars into the unemployment system since the spring — a magnet for criminals that’s led to surging theft and fraud attacks. This has contributed to at least $36 billion being taken from out-of-work Americans,” the outlet reported Monday.
“Most of the theft has focused on Pandemic Unemployment Assistance, a temporary program created by the federal CARES Act in March. It offers unemployment benefits to workers who don’t ordinarily qualify, like the self-employed, gig workers, freelancers, contractors, and part-timers,” CNBC added.
The CARES Act allowed for $360 billion to flow into the federal supplemental unemployment benefit program. The Office of the Inspector General for the Department of Labor estimates that at least 10% of that money was lost to scammers — “perhaps more than $10,000 or $20,000 per fraudulent claim.”
‘This is the largest fraud attack on the U.S. ever. Period,” one security expert told CNBC. “And it’s not even close.”
As The Daily Wire reported in November, at least $1 billion of the missing $36 billion disappeared in California and may have ended up lining the pockets of convicted murderers, rapists, and death row inmates in the California prison system.
“Nine district attorneys across California and a federal prosecutor on Tuesday made these allegations and called for Gov. Gavin Newsom to intervene to stop such unemployment swindling in California jails and prisons,” the Los Angeles Times reported in November, noting that the money went to prisoners, who are ineligible for unemployment relief — including COVID unemployment relief — through “fraud that involves identity theft of prisoners as well as alleged scams by individual inmates and organized gangs to game the state system.”
“So far, investigations have uncovered more than $400,000 in state benefits paid to death row inmates, and more than $140 million to other incarcerated people in California’s 38 prisons, according to Sacramento County Dist. Atty. Anne Marie Schubert, who helped organize and lead a task force that uncovered the alleged dupery,” the L.A. Times added. “In total, payments to those ineligible due to incarceration in prisons and jails could total nearly $1 billion, the prosecutors claim.”
California temporarily suspended some unemployment payments for a short time while they investigated some larger instances of fraud.
The most recent COVID relief bill dumped additional funding into the supplemental unemployment program, but as part of the agreement, states are required to enhance security around the application process. “Current recipients will have to submit documents to verify employment — perhaps tax forms or pay stubs — within a 90-day time frame offered by the state. Applicants after Jan. 31 would have 30 days.”
In addition, the bill requires applications to the program to certify, on a weekly basis, that their ongoing issues are because of the novel coronavirus and not because of outside factors.
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