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IPFS News Link • Crime

Criminals Spent COVID-19 Unemployment Benefits On Drugs, Weapons: Department Of Labor OIG

• https://www.zerohedge.com by Katabella Roberts

Congress in March 2020 launched an unemployment aid program for Americans who were unable to work as a result of lockdowns, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

However, the OIG has found that multiple states failed to protect some of the funds from improper payments, including fraud, and that Pandemic Unemployment Assistance was granted to individuals who were not actually eligible.

In a report (pdf) published on Sept. 30, the OIG said that among the four states it focused its research on—California, Georgia, Kentucky, and Michigan—a total of $30.4 billion of the $71.7 billion in Pandemic Unemployment Assistance and Federal Pandemic Unemployment Compensation that was granted was paid improperly, making up 42.4 percent of the payouts.

An estimated $9.9 billion was likely paid to fraudsters in those states, including "criminal enterprises" that discovered that unemployment insurance fraud is a "low-risk, high-reward crime," according to the report.

"They have invested fraudulent UI [Unemployment Insurance] proceeds to further other criminal activity, such as purchasing guns and drugs. Individuals who we find are central to this conduct have been indicted on charges including racketeering conspiracy," the report states.

The report focused on unemployment benefit payments made between March 28, 2020 and March 14, 2021.

In California alone, an estimated $20 billion in unemployment money was stolen by criminals, according to the California Employment Development Department (pdf).


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