The U.S. Labor Department is taking decisive action to recover over $9 million in taxpayer money from New Jersey that was intended for COVID-19 pandemic unemployment benefits. A significant portion of these funds was illicitly obtained by fraudsters, as The Post has learned.
According to an investigation conducted by the Department of Labor’s Office of Inspector General, these scammers exploited Social Security numbers from various states, including those linked to multiple addresses. Shockingly, they even used identities belonging to prisoners, deceased individuals, and children to fraudulently claim unemployment benefits.
In New Jersey alone, more than 53,000 Unemployment Insurance claims were identified as fraudulent due to this scheme. The state is now expected to soon return the $9 million pilfered from the federal coffers. This recovery effort represents just a small portion of the nearly $1 billion in potential unemployment fraud that Labor Inspector General Anthony D’Esposito and his office are currently investigating across the nation.
Back in January, D’Esposito’s office issued a memo highlighting the risk of fraud within state unemployment insurance funds. As a result of this warning, nearly 220,000 suspicious accounts were flagged, prompting the inspector general to dispatch a strike team to New Jersey in April to address the issue.
D’Esposito’s office had sent a January memo warning about state UI funds being potentially defrauded.
Nearly 220,000 suspicious accounts were initially flagged as a result, and the inspector general deployed a strike team to New Jersey in April.
“New Jersey’s 53,000 fraudulent accounts illustrate Governor Sherrill’s failure to safeguard funds and a complete disregard for the American taxpayer,” D’Esposito said.
“Allowing these accounts to go unchecked is unacceptable. New Jersey’s reckless approach demonstrates a profound betrayal of hardworking Americans. My office will not rest until every account has been examined and every stolen dollar is recovered.”
Sherrill took office in January after former Gov. Phil Murphy had served two terms that spanned the pre- and post-pandemic periods in the state.
The IG’s office demanded that banks freeze most of the suspected fraudulent benefits in May.
The UI accounts spanned at least 12 states, including New York, Illinois and California, and were asked to be preserved until the end of the calendar year, per Labor officials.
“During the pandemic, criminals and bad actors exploited weaknesses to steal billions of dollars from the American people,” Acting Labor Secretary Keith Sonderling said in a prior statement.
“We are working with Vice President Vance to ensure we use every tool at our disposal to track down stolen funds, hold fraudsters accountable, and return money to the taxpayers to ensure this program is used as intended.”
D’Esposito and Sonderling have been coordinating with the White House anti-fraud task force, which has led to indictments and other attempts to recoup taxpayer funds.
The Post reached out to a rep for Sherrill’s office for comment. Reps for ex-New Jersey Gov. Phil Murphy could not be reached.
