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Fraud overwhelms pandemic-related unemployment programs

CDLE building
Posted at 10:41 AM, Feb 28, 2021
and last updated 2021-02-28 12:42:21-05

COLUMBUS, Ohio (AP) — Massive fraud in the nation's unemployment system is raising alarms even as President Joe Biden and Congress prepare to pour hundreds of billions of dollars into expanded benefits.

A government watchdog agency says that as of December, nearly two dozen states had not started using a key system to block fraud. An Associated Press review finds that many states will not even publicly acknowledge the extent of the problem.

Attempts to combat fraud are causing delays for people who legitimately need unemployment benefits during the coronavirus pandemic. Others have become victims of identity theft.

Denver7 has received multiple reports from viewers who reached out to ask for help after receiving a 1099-G in the mail showing they collected unemployment benefits, even though they never saw a dime.

The Colorado Department of Labor and Employment (CDLE) has received 11,067 reports of tax forms tied to a fraudulent unemployment claim. As of Friday, Feb. 26, the state has sent out 2,463 corrected forms.