Inmates Collecting Millions from Fradulent Unemployment Checks

Pennsylvania officials said this week the fraud occurred in county prisons  because they failed to implement a system of cross-checking the Social Security  numbers of benefit applicants, like they did with inmates in their state and  federal prisons.

Republican Gov. Tom Corbett said his administration is correcting the  problem. But the 1,162 inmates had already collected about $334 every week for  more than four months, costing taxpayers roughly $7 million.

The state labor department said detecting the fraud is more difficult now  that benefit checks — once intercepted in inmates’ mail — have largely been  replaced with direct deposits to bank accounts. And the biweekly phone calls to  renew benefits can be made by a friend or relative at home.

Overall unemployment fraud is now at 2.85 percent, according to the Labor  Department. The agency doesn’t have a specific number for fraud payments but  said overall improper payments cost taxpayers $4.9 billion from July 2011  through June 2012, the agency’s most recent reporting period.

The problem is hardly isolated to Pennsylvania. The states with the highest  fraud rate over that period were Arizona at 9.21 percent; Mississippi at 9.05  percent; Louisiana at 8.29 percent; South Dakota at 5.95 percent; and  Pennsylvania and New Mexico tied at 5.22 percent. The total amount of improper  payments was roughly $890 million.

A recent audit in South Carolina purportedly shows the state is also paying  unemployment benefits to inmates as well as children, dead people and residents  of other states.

State Sen. Kevin Bryant said the percentage of claims could be as high as 25  percent. However, Bryant, a Republican, said Wednesday the sample audit was  performed by a private firm and the findings cannot be released unless the  state’s Department of Employment and Workforce hires it for a full audit.

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