Records show the Illinois Department of Employment Security lost $1.2 million in taxpayer money to fraudsters

CHICAGO (CBS) — The state of Illinois sent more than $1.2 million in unemployment benefits to: accounts of fraudsterswhile many who were unemployed waited months—and sometimes longer—for the money they owed.

For the first time, the Illinois Department of Employment Security (IDES) had to hand over data to CBS 2 that shed light on the extent of unemployment fraud, which the agency has failed to prevent since the start of the pandemic.

In March, CBS 2 discovered for the first time multiple instances where plaintiffs’ bank accounts were hacked and their benefits sent to fraudsters’ accounts. Sharon Thomas was one of those victims. A total of $5,472 worth of WW dollars was transferred from her account to the scammer’s.

Thomas immediately told IDES that the money went to the wrong account. But she said the state continued to deposit her unemployment benefits into that account anyway.

She also struggled to get any help from IDES at first — an experience echoed by many who were laid off during the pandemic. She said she has worked hard over the course of many months to do what the representatives asked to confirm her identity.

“I’ve sent them my Social Security card and driver’s license at least six or seven times in different departments,” said Thomas, who lives in Midlothian, in March. “And if you call there, you can’t get the same person twice — you’re put in a paging system that, when someone’s free, they’ll call you the next time. And I just kept waiting and hoping.”

Thomas ended up filling out multiple payment tracers and sending them out for the weeks she was out of work. Tracers are crucial forms intended to help IDES investigate when unemployment benefits have never been received by the claimant. The process requires filling in the total dollar amount that someone believes they owed for the periods of time in which they did not receive their benefits.

Thomas believed IDES stopped the fraud when she first reported it last May. Four months later, after talking to agency representatives, she thought her problem had been resolved. Finally, she was called back by another representative. Instead of getting back the money she owed, she was told the check had been released — but not to her.

“And I was just in tears,” Thomas said. “I’m like, how could this happen?”

Thomas said she sent in her tracer forms in October 2021. In December, an IDES representative told her that the agency could not find them. She had to resubmit it and was told to come back in 45 days. More than two months later, she was still waiting for an outcome.

†[The IDES employee] found they had just been sitting idle and they weren’t moving on to the next step as they should have been,” Thomas said.

The agency has in the past refused to disclose the extent of pandemic-related unemployment fraud. To understand how often unemployment benefits are intercepted by scammers, CBS 2 filed a Freedom of Information Act (FOIA) with IDES in December 2021. The request asked for records that could show how many total payment tracers had been submitted and how much money was lost from March 1, 2021 through November 30, 2021 — a time frame when IDES sources said the number of fraud cases had started to rise.

At the time, the IDES spokesperson and a FOIA official repeatedly claimed that the agency had not tracked the records and refused to provide redacted copies of the tracer forms, saying it would be inconvenient to do so.

“So when government officials are hiding this kind of information, we have to ask, why are they hiding this?” attorney and FOIA expert Matt Topic said in an interview earlier. “Why don’t they just turn this around? What have they got to hide?’

On Jan. 10, CBS 2 filed an appeal with the Illinois Attorney General’s Office, asking the agency to review IDES’ response for possible FOIA violations. That lawsuit revealed what IDES originally told CBS 2 was not true: The agency actually keeps track of how much it has refunded plaintiffs for fraud.

As a result, IDES was forced to submit the data to CBS 2 on March 31. It contains information on more than 1,000 tracers filed by plaintiffs from January 2021 through March this year. That’s more than 1,000 times IDES has paid people back after reporting they never received their benefits.

The data is revealing and shows for the first time how IDES has failed to prevent a large amount of unemployment fraud. In just over a year alone, the agency refunded plaintiffs more than $1.2 million originally sent to fraudsters.

The total amount lost during the pandemic and repaid to claimants is likely much higher. An IDES spokesperson said the agency is currently investigating more than 400 additional payment tracers filed by claimants who have not received their benefits.

Thomas is one of the plaintiffs still waiting for a solution. In a recent interview with CBS 2 — an entire year since her benefits were stolen — she contacted IDES multiple times. Although she did not receive her money, she said an IDES representative told her she could be paid in the coming months.

“I just want it to be over,” Thomas said. “I want what I owe. And I want to be done with it.”

She’s not alone. Shonda Perkins is waiting for more than $800 after she said her unemployment benefits were intercepted by a fraudster. Despite filling out multiple tracers, she still hasn’t received any help — or her money — from IDES.

“It’s just not fair to us — the people who are waiting for money, because we really need that money,” Perkins said. “I hope in the future there is a way that they can improve the system so that this never happens to people again.”

The IDES spokesperson did not specifically answer CBS 2’s questions asking how the agency failed to prevent so much money from ending up in the wrong hands.

The agency has issued the following statement to CBS:

“Payment tracers are individual paper records. While there is no requirement that a spreadsheet of all payment tracers be maintained, an IDES employee actually created and maintained a spreadsheet of the tracers without the need for it. Once the person realized that the spreadsheet might be relevant to respond to a FOIA request, they contacted the FOIA office with the spreadsheet and it was provided to you within a few days.

“All states across the country have faced a wave of bad actors within the state’s unemployment insurance systems. In Illinois, IDES has implemented new tools and ongoing outreach campaigns to help existing claimants protect their unemployment insurance accounts. IDES ILogin, an advanced identity verification tool that uses multi-factor authentication to secure claimants’ accounts, is one of many in our arsenal – along with public information sharing, collaboration with federal partners, and additional innovative technology – which helps claimants to have their accounts secured It is important to note that the dates in the relevant spreadsheet are the dates for the payment reissue, i.e. they correspond to when the claimant has their reissued payment received, not the date on which the original order taling was misdirected. There is a window between the original missed payment, when the claimant completes their affidavit of non-receipt, and w The department issues and investigates the claim. We believe that the success of ILogin multi-factor authentication and other tools has significantly reduced this type of fraud. And while fraudsters have targeted all aspects of the unemployment system, data in Illinois and states across the country points to the vast majority of total fraud that occurs in the PUA program because of the lack of federal integrity measures.

“Plaintiffs can learn more about how to protect their unemployment insurance account at ides.illinois.gov/fraud. More information about ILogin is also available at ides.illinois.gov/ilogin.”

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