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New Government Report Highlights Scope Of Unemployment Fraud In Illinois

CHICAGO (CBS) -- For months CBS 2 has chronicled countless problems for people out of work because of the COVID-19 pandemic, including no unemployment benefits, no return phone calls and even some getting benefits they did not apply for while tens of thousands went without. Now a new federal inspector general report reveals Illinois has a big unemployment fraud problem.

The report flags Illinois as one of the states having big problems with unemployment fraud, specifically stating Illinois is one of the states that could have done more earlier to verify identities.

Recent documents CBS 2 obtained through the Freedom of Information Act not only back up concerns flagged in that inspector general report but give a deeper understanding of just how large the problem is.

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"It's a little creepy," said David Storey, describing getting benefits for which he did not apply.

Frustrating, extremely," said Heidi Hartwig, another unemployment fraud victim. "I went on and filled out another form online and still don't get an email confirmation or anything that I submitted a request.

Hartwig, a banker, and Storey, an accountant, both got the same surprise from the Illinois Department of Employment Security this month: IDES debit cards and letters stating they have qualified for benefits even though they have never applied for them.

"Shocked first of all, but surprised that they got all the information right except apparently my start date," said Storey.

According to public records obtained by CBS 2 Investigators, they're just two of at least 50,000 people who may be victims of fraud -- or committed it -- within the state's Pandemic Unemployment Assistance system this year. Those are benefits for independent contractors and gig workers. IDES records from Oct. 9 show that of the 250,253 PUA claims paid so far this year, 14,184 could be fraud related. And of the more than 142,000 unpaid claims, more than 40,000 were flagged for identity verification issues.

"I froze my credit bureaus, and then in addition to that I want to know if they're able to file unemployment are they able to file my federal taxes?" said Hartwig.

The federal inspector general report highlights some reasons for Illinois' fraud problems, including not having enough resources to check claims, incompatibility between the regular unemployment computer system and the multimillion dollar one implemented by Deloitte to handle PUA claims. But it also shows Illinois is taking steps to remedy them, including cross matching names between systems and using Experion for identity verification.

Hartwig and Storey, both now stuck in the IDES callback queue, say it is not enough.

"I don't have a lot of faith that IDES can fix this," said Storey.

Records also show IDES stops some payments for fraud verification issues.

Gov JB Pritzker has acknowledged understaffing has been a problem from the pandemic's beginning. But he and IDES have also sidestepped talking about other problems over the past few months.

An IDES spokesperson says he is working to get answers to some of CBS 2's questions and will get back to us.

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