Labor Department Recovers $9 Million in Fraudulent New Jersey Unemployment Claims from Pandemic Era
Federal investigators identified more than 53,000 fraudulent unemployment claims in New Jersey and are returning over $9 million to U.S. coffers. The case is part of a broader review of nearly $1 billion in potential pandemic-era fraud.
New York PostU.S. Department of Labor is recovering more than $9 million in federal funds from New Jersey after investigators determined the money had been paid to fraudsters through the state’s unemployment insurance system. The Department of Labor Office of Inspector General found that more than 53,000 Unemployment Insurance claims in New Jersey were fraudulent.
Scammers used Social Security numbers tied to multiple addresses, prisoners, dead people, and children to obtain the benefits, according to the inspector general’s office. The $9 million is expected to be returned soon to federal accounts, a Labor representative said.
The amount is a fraction of the nearly $1 billion in possible unemployment fraud the inspector general’s office is reviewing nationwide.
Inspector General Anthony D’Esposito’s office sent a January memo warning states about potential fraud in unemployment insurance funds. Nearly 220,000 suspicious accounts were flagged, and a strike team was sent to New Jersey in April. In May the inspector general’s office ordered banks to freeze most of the suspected fraudulent benefits.
The accounts spanned at least 12 states, including New York, Illinois, and California, and officials directed that the funds be preserved until the end of the calendar year. “New Jersey’s 53,000 fraudulent accounts illustrate Governor Sherrill’s failure to safeguard funds and a complete disregard for the American taxpayer,” D’Esposito said.
“Allowing these accounts to go unchecked is unacceptable.
New Jersey’s reckless approach demonstrates a profound betrayal of hardworking Americans. ” Governor Sherrill took office in January after former Gov. Phil Murphy completed two terms. The Post reached out to a representative for Sherrill’s office for comment.
Representatives for former Gov. Murphy could not be reached. Acting Labor Secretary Keith Sonderling said in a prior statement that criminals exploited weaknesses during the pandemic to steal billions from unemployment programs.
“We are working with Vice President Vance to ensure we use every tool at our disposal to track down stolen funds, hold fraudsters accountable, and return money to the taxpayers,” Sonderling said. D’Esposito and Sonderling have coordinated with the White House anti-fraud task force. That coordination has produced indictments and other efforts to recover taxpayer money.
