PHOENIX (3 On Your Side) -- Arizona may have been hit with as many as 2 million fraudulent unemployment claims, 3 On Your Side has learned. The new number dwarfs previous estimates, as scammers continue to target taxpayer dollars in unemployment systems across the country.
DES believes scammers are using random in-state addresses in an effort to circumvent common fraud indicators, which include out-of-state addresses.
When a letter from the state's Department of Economic Security (DES) landed in Ronnie Litchfield's mailbox, he handed it right back to the postman.
"I'm retired so I wasn’t looking for unemployment, and it was somebody else’s name on it," Litchfield said.
On a neighborhood social media page, another neighbor shared a similar story.
"Twice in my neighborhood within a couple blocks of each other, and if that’s happening here twice, I wonder how much it’s going on in the rest of the state," Litchfield pondered.
Turns out - a lot.
Marilyn Dantico received a prepaid debit card from DES in the mail last week, and reported it to the agency right away.
"The person said tear it up, don’t worry about it," she recalled.
Dantico found out several neighbors had also received unexpected cards. Then another one landed in her mailbox. This time, it wasn’t addressed to her.
"Someone I don’t know, have never heard of," she said.
She called the state’s fraud line again.
"I got a busy signal," Dantico said. "It’s just crazy to have a busy signal on a fraud line. That’s really the bottom line."
According to Brett Bezio, a spokesperson for DES, the agency's fraud center receives between 200 and 600 calls daily.
Brett Bezio, a spokesperson for DES told 3 On Your Side in the past three weeks, the agency has received a million new claims for Pandemic Unemployment Assistance, a majority of which are believed to be fraudulent. That’s on top of another million claims that were already flagged as fraud and under review. DES believes scammers are now using random in-state addresses in an effort to circumvent common fraud indicators, which include out-of-state addresses.
In a briefing with reporters in September, DES Director Michael Wisehart said Arizona has likely paid out hundreds of millions of dollars in fraudulent benefits since the pandemic began. DES said it was not able to provide an updated estimate for this report.
"It doesn’t seem that hard to me to put some checks and balances in place to prevent this from getting to the point it is where DES is mailing out letters," Litchfield said.
This week, DES announced it is “close to implementing a robust front-end identity check to prevent fraud while making it faster and easier for legitimate applicants to claim their benefits.” The agency also says, in most cases, the fraud is caught quickly and money is never actually loaded onto the cards.
According to Bezio, DES has been involved in approximately 10 fraud investigations in other states that have led to arrests of criminals who targeted unemployment programs in Arizona.
“Given the complexity of unemployment fraud related to identity theft, with the majority of perpetrators residing outside of Arizona, the investigations of these cases involve a lot of information, research and collaboration; as such, no arrests have been made in Arizona specific to this criminal activity,” he said in an email.
Anyone who receives an unexpected debit card from DES should file a complaint and then destroy the card, according to the agency. As 3 On Your Side reported, it takes DES investigators an average of 34 days to respond to fraud reports.