Pennsylvania Tackling 30,000-Case Backlog of Unemployment Fraud

by Anthony Hennen


Since the pandemic hit and government relief attempted to ease the pain of economic shutdowns, concerns of taxpayer money being wasted or fraudulently obtained has been a pressing issue.

In Pennsylvania, the state may see a special prosecutor appointed to focus on cases related to unemployment fraud.

The Department of Labor & Industry could use the help, too: staffing shortages have meant a large backlog of potential fraud cases has built up, as The Center Square previously reported.

The proposed legislation, HB2648, would appoint a special state prosecutor in the Office of Inspector General for “rooting out and prosecuting individuals who have used the COVID pandemic to fleece our Unemployment Compensation system,” Rep. John Lawrence, R-West Grove, wrote in a legislative memo.

“The answers that I received during appropriations hearings were, I think, very troubling,” Lawrence said.

More than 33,000 outstanding fraud cases were more than a month old as of early June, he said.

Staff at the Department of Labor have gotten much more efficient in processing cases over time, but not enough to make up for staffing shortages. Labor & Industry Secretary Jennifer Berrier noted in a March committee hearing that the department has a 50% turnover rate, and noted that low pay was a factor.

Ensuring the state government can keep up with fraud cases, however, is important from a fiscal standpoint.

“We’re talking about a substantial amount of fraud – these people need to be prosecuted, we need to recover the funds if we can, obviously,” Lawrence said.

In February, Attorney General Josh Shapiro announced five out-of-state residents were charged with defrauding the unemployment assistance program. They filed claims for more than $900,000 and received about $455,000. In March, three Pittsburgh residents were charged with stealing more than $800,000. Almost three dozen people were charged by the attorney general’s office for illegally obtaining $3.1 million in pandemic assistance funds.

“(The unemployment fraud issue) merits additional attention, it’s clear that there’s not enough staff to handle the over 30,000 cases,” Lawrence said. “It’s obvious we need to bring in some additional resources.”

It’s unclear just how many fraudulent claims have been made, but a federal Labor Department hearing estimated at least $163 billion in overpayments happened nationwide.

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Anthony Hennen is a reporter for The Center Square. Previously, he worked for Philadelphia Weekly and the James G. Martin Center for Academic Renewal. He is managing editor of Expatalachians, a journalism project focused on the Appalachian region.
Photo “John Lawrence” by John Lawrence. Background Photo “Pennsylvania State Capitol” by Schindlerdigital. CC BY-SA 4.0.

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