(The Center Square) – The Michigan Unemployment Insurance Agency (UIA) has fired or suspended 18 employees since March 2020 after criminal investigations.
The investigation follows the agency losing at least $8.5 billion of taxpayer money to fraud in two years after the federal government attempted to soften the blow of COVID-19 via billions of federal stimulus dollars.
However, that money attracted international criminal organizations, domestic criminals, and even agency employees who used stolen identities and heightened access to loot taxpayer money.
The Detroit News first reported the story.
UIA Communications Manager Nick Assendelft cited the fraud webpage to detail how the UIA fights fraud, saying it has kept its fraud rate below 1%.
“UIA takes fraud very seriously and performs daily reviews of staff operations to identify any issues of concern,” Assendelft said in a statement. “When criminal activity is identified, UIA assists local law enforcement in criminal investigations and building cases for successful prosecution."
Gov. Gretchen Whitmer’s $74 billion proposed budget aims to spend $88 million strengthening Michigan’s UIA system. Right now, the UIA uses a 13-pronged approach to reduce fraud, including employing outside contractors.
“UIA has been able to slash its overall fraud case rate to 0.57 percent and with additional anti-fraud resources and new technology in Governor Whitmer’s Fiscal Year 2023 budget request, we will have even more tools to combat fraud and bring bad actors to justice,” Assendelft said.
The UIA has been under fire since Whitmer shuttered most of Michigan’s economy in 2020, but the UIA wasn’t ready. In spring of 2020, fraudsters and real unemployed claimants filed over 388,000 claims in one week – 77 times more than an average pre-pandemic week – overwhelming an aged system.
The UIA approved a majority of the claims, including many of the fraudulent ones.
Michigan's unemployment rate hit 22.7% in spring of 2020, eclipsing the Wolverine State's unemployment rate during the Great Recession, but the unemployment offices were still closed to in-person interaction, leaving thousands of Michiganders to call the UIA.
In Nov. 2020 amid high claims, then-former director Steve Gray resigned and took with him a confidentiality agreement and a severance package of $85,872.
The fraud task force started by Attorney General Dana Nessel has charged 54 people, executed 56 search warrants, convicted 13 people, and has 36 cases pending.
Information about all the charges is here.