Massive COVID-19 related unemployment fraud discovered in Maryland

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Governor Hogan
Posted at 11:50 AM, Jul 15, 2020
and last updated 2020-07-16 10:19:59-04

ANNAPOLIS, Md. — Governor Larry Hogan on Wednesday said the State uncovered a massive criminal scheme involving over 47,500 fraudulent unemployment claims totaling more than $501 million in benefits.

The discovery was made after the Maryland Department of Labor noticed an unusual spike in claims which were made using stolen identities and personal information from previous national data breaches.

Most of the claims were denied, according to Maryland Secretary of Labor Tiffany Robinson. It's unclear how many if any were approved.

Similar fraud was also found to be going on in other states, prompting federal authorities to take over the entire investigation.

Despite the massive number of fraudulent claims, neither the state’s unemployment insurance system or personal information of applicants was breached, according to the Labor Department.

SEE ALSO: Impostor uses Maryland man's identity to steal unemployment insurance benefits

After getting off to a disastrous start plagued with delays, glitches, and crashed computer systems that left thousands of residents in limbo -- the department now reports that 96.4 percent of unemployment claims have been processed.

That equates to $4.3 billion in federal unemployment payments to more than 489,000 Maryland residents.

Since March 21 -- 965,173 Maryland residents filed new claims, compared to only 446,883 claims in the years 2018 and 2019 combined.

While the state works to keep up with all the claims, the Unemployment Insurance Trust Fund is running out of money.

In an oversight hearing last Thursday, Robinson told lawmakers that the Division of Unemployment Insurance would need to borrow money from the U.S. Department of Labor in the next several weeks.

Though unemployment numbers remain high and thousands of more claims continue to be filed, Hogan says 98% of the state's economy is open.

As for the current status of COVID-19 in Maryland, Tuesday saw the biggest jump in new cases since June.

Health Officials said the spike was partially connected to non-compliance at bars and restaurants, prompting Hogan to call on local governments to crack down on violators.

To date, there have been 75,016 confirmed cases including 3,209 deaths.

Out of 855,941 tests -- 605,072 were negative leaving the state with a positivity rate of 4.49%. Hospitalizations are also down 73% from its peak 77 days ago.

One concerning trend involves Marylanders under 35-years-old, who are now contracting the virus at an 83% higher rate than those 35 and older.

RELATED: Maryland day by day in the fight against COVID-19

Despite most numbers pointing downward, Hogan is still urging citizens to avoid large crowds and public transportation and to continue working from home if possible.

“Young people should avoid crowded bars, house parties, and large gatherings of any kind. You are not only putting yourselves at risk, you are also risking the lives of your parents, your grandparents, and other vulnerable people in the community,"Hogan said.

Meanwhile Hogan says citizens should skip traveling to places experiencing a spike in cases, while encouraging those returning to get tested.

“This battle is not behind us, not by a long shot. Only you can stop the spread of this virus,” said Hogan.

Finally, Hogan closed out his news conference by addressing if and when schools will be reopening.

“We cannot and should not rush this decision. It is absolutely critical that we get it right for our communities and for each and every one of our children and our teachers.”

Right now several counties and jurisdictions are continuing to finalize their proposed plans in order to meet an August 14 deadline set by the Maryland State Department of Education.

Hogan says he and State Superintendent Karen Salmon will provide a status update next week.