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Colorado launching task force to investigate, prosecute unemployment fraudsters

State says it has flagged 1.1 million fraudulent claims
phil weiser unemployment fraud task force
Posted at 11:50 AM, Mar 04, 2021
and last updated 2021-03-04 13:53:30-05

DENVER – Colorado is launching a statewide task force to try to identify and prosecute the people responsible for more than 1 million fraudulent unemployment claims that have been filed statewide since the start of last year.

Colorado Attorney General Phil Weiser made the announcement Thursday morning along with officials from the Colorado Department of Labor and Employment and 1st Judicial District Attorney Alexis King.

Colorado launching task force to investigate, prosecute unemployment fraudsters

“This unprecedented amount of fraud and theft requires a coordinated and comprehensive statewide response, so that wrongdoers can be identified and held accountable,” Weiser said in a statement.

The so-called Colorado Unemployment Fraud Task Force will be comprised of investigators from the attorney general’s office, CDLE, Colorado Bureau of Investigation and several district attorneys’ offices across Colorado and will work with federal agencies and prosecutors as needed, Weiser said.

CDLE Executive Director said the latest fraud data with respect to unemployment insurance in Colorado showed more than 1.1 million fraudulent claims had been filed since the beginning of last year, including around 800,000 in 2020 alone.

He said that amounted to more fraudulent claims being flagged than legitimate claims that had been paid out. In total, the state estimates it prevented about $7.5 billion in fraudulent payments from being sent out.

The CDLE says that it has paid out about $6.5 million in fraudulent claims but has been able to recoup about $1 million of that money thus far.

Fraud has plagued the unemployment systems for Colorado and most other states since last year, hitting the Pandemic Unemployment Assistance (PUA) program for gig workers and self-employed workers first starting last summer and then moving into the state’s regular unemployment system in December before the two were combined when Colorado upgraded to MyUI+ in January and implemented a host of new fraud triggers and an identity verification system.

Colorado has not made any arrests or prosecuted anyone thus far for unemployment insurance fraud that could be announced as of Thursday, Weiser said. He said that the task force’s priority would be looking for people to bring to justice.

Barela said the CDLE was adding members to its criminal investigative team who will work in partnership with the CBI to investigate potential fraudsters or identity thieves, then work with the consumer protection and criminal investigation teams at the AG’s office and team of district attorneys to prosecute the cases.

King, 3rd Judicial District Attorney Henry Solano and 9th Judicial District Attorney Jeff Cheney are the district attorney representatives on the task force. Any statewide cases that involve several jurisdictions would be prosecuted by the AG’s Office’s special prosecutions unit in concert with the local district attorney, and the statewide grand jury could also be used.

Should any cases in Colorado involve cross-state or international fraud rings, the task force would work with the U.S. Attorney’s Office for Colorado to prosecute.

“We are eager to share resources and expertise in this formal partnership with the Attorney General and our state law enforcement agencies to begin prosecuting these individuals and hold them accountable,” Barela said in a statement. “With the task force dedicated to prosecution, we can continue to focus on helping the hundreds of thousands of Coloradans who are legitimately eligible for state and federal unemployment benefits.”

King said that district attorneys would likely be looking at “high-level misdemeanors to mid-level felonies” when it comes to prosecuting any potential cases, depending on the charge. Weiser said that the Colorado Organized Crime Act could also potentially be utilized if investigators identify a criminal enterprise operating the schemes here.

CDLE officials have upgraded their fraud reporting mechanisms online and parsed out the forms where individuals or employers can report identity theft. Weiser also pointed people to his office’s identity theft repair kit as another option to learn about and manage identity theft.

The CDLE said the task force plans to have its first meeting “in coming days” to review current investigations and start staffing up for potential prosecutions.

An estimated 13,034 regular unemployment initial claims and 9,916 PUA initial claims were filed last week in Colorado.