New York Reports $11 Billion in Fraud Just Days After Midterms

New York State Comptroller Tom DiNapoli has released the results of an audit of unemployment payments during COVID. The findings report around 14% of the $76.3 billion of payments made between January 2020 and March of 2022 were to scam artists and fraudsters.

The high volume of claims during the pandemic combined with the New York Department of Labor’s outdated unemployment system made the payment system easy to scam and abuse. The audit estimates the total cost of improper payments at $11 billion, but the report admits that’s likely lower than the true number.

Warnings Ignored

The State Comptroller’s Office says the NY Department of Labor had been warned about the system’s flaws and blind spots. The DOL is now working to update the system with the knowledge they’ve gained from the audit to prevent any more scenarios like this.

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The audit reports that some of the fraud possibly came from outside of the US. Officials report there is little chance that the majority of that money will ever be recovered or reimbursed.

Response To The Audit

There has been scrutiny from New York State Republicans around the timing of the release. The audit’s finding were released on Tuesday, November 15 – just one week after Election Day. Given the close results of the gubernatorial race between incumbent Kathy Hochul and Republican challenger Lee Zeldin, some speculate if the Democratic DiNapoli held the results until after ballots had been cast.

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New York employers are also infuriated by the news. Upstate United’s Executive Director, Justin Wilcox, blasted the “total disregard” for the legitimately unemployed and local businesses. Wilcox said Governor Hochul should “fully refund the $159 million that employers were forced to pay through an interest assessment surcharge in September.”