Fraud in the News

Unemployment fraud, another COVID-19 scam out of California and more

Thousands falsely charged with unemployment fraud

Between 2013 and 2015, the Michigan Unemployment Insurance Agency allegedly used a flawed automated system — the Michigan Integrated Data Automated System — which falsely charged thousands with unemployment fraud and took millions from the victims, according to an Undark magazine article.

Class-action lawsuits allege that the system searched unemployment datasets and used flawed assumptions to flag people for fraud, such as deferring to an employer who said an employee had quit — and was thus ineligible for benefits — when they were really laid off, according to the article.

The agency charged more than 40,000 people and billed them about five times the original benefits, which included repayment and fines of 400 percent plus interest, according to Undark. The agency later ran a partial audit and admitted that 93% of the charges had been erroneous — yet the agency had already taken millions from people and failed to repay them for years.

See Government’s Use of Algorithm Serves Up False Fraud Charges, by Frankie Schembri, Undark magazine, June 1. 

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