4:13 PM, Feb 27, 2020


New task force takes aim at unemployment fraud as experts urge system reform

Posted at 10:59 AM, Jun 13, 2020

The State of Michigan announced the formation of the Unemployment Insurance Fraud Task Force Friday that includes state and federal agencies teaming up to investigate and prosecute unemployment fraud.

“Unemployment benefits should go to Michigan residents dealing with the hardships of COVID-19, not to criminals seeking to profit from the loses of others,” said Michigan Attorney General Dana Nessel. “Unfortunately, this unprecedented public health crisis has created an opportunity ripe for abuse by people who are exploiting the system and hampering the ability to get legitimate claims paid.”

At the same time, experts in employment law and workers' rights advocates are pushing for reform when it comes to the state's automated system known as MIDAS (Michigan Integrated Data Automated System).

Professor Rachel Kohl, a professor at the University of Michigan Law School's Workers' Rights Clinic, urged lawmakers to make changes to the statutes under which MIDAS is set up.

"Typically, we take on two to three-hundred cases a year, but since the pandemic hit, we've already handled thousands of COVID-related unemployment matters in addition to our already active, heavy caseload," said Kohl.

Kohl and others said flaws in the MIDAS system make so restrictive that it erroneously flags and stops legitimate claims for unemployment benefits.

"It's really frustrating for the people out here being honest," said Romel Wright, a laid-off factory worker who also had to stop working as a barber.

In a statement, a spokesperson from the Michigan Department of Labor and Economic Opportunity said:

Using alerts and guidance from law enforcement, and a review of its fraud management system, the UIA developed further fraud protections, including additional identification verification. To prevent potential fraud and respond to nationwide attacks on unemployment systems across the country, the agency announced last week that it used the latest available fraud prevention information and send a Stop Payment notice to around 340,000 active accounts. Over the last week, the UIA was able to validate more than 140,000 legitimate accounts, with benefits resuming within days. Working with fraud experts and law enforcement, the agency continues to use data analytics and direct outreach and to identify legitimate claimants and release benefits as quickly as possible.

State officials said that many new claims filed in the last several weeks are suspected of fraud, and over 200,000 people whose accounts have been flagged must now provide additional identification verification.

Romel Wright said he's already done that.

Wright telling 7 Action News, "For the people who are not doing what they're supposed to do, you're making it hard for the people who really need it to pay bills."