NewsLEX 18 Investigates

Actions

As thousands wait for UI benefits, thousands try to bilk the system

Posted at 8:18 PM, Jan 25, 2021
and last updated 2021-01-26 14:48:04-05

LEXINGTON, Ky. (LEX 18) — For months, thousands of Kentuckians have waited for unemployment checks that never come. Many of them are honest people trying to stay afloat financially.

However, there are also those trying to scam the system. Howard Stovall knows first-hand.

"They're frauds and they're trying to steal money from people who deserve it," said Stovall who is a manager at the indefinitely closed Kentucky Theatre in downtown Lexington. It shut its doors in October because of the pandemic.

"We had more fakes than we had employees at the time we closed," said Stovall who has received 30 letters about fraudulent claims made on the theatre.

He says not one name listed worked for him.

"Never heard of this person he claims he worked at the theatre from August of 2018 until March 22, 2020. None of these people ever worked there," said Stovall.

He sends every letter back to the state labor cabinet with a bold message at the bottom stating the person 'never worked at the Kentucky Theatre.'

On Monday, Gov. Andy Beshear announced that approximately 87,000 claims are pending with more than half of those considered fraudulent.

Stovall says it makes him angry, angry about those trying to defraud the system, and angry because he believes the state should be able to determine the claim is bogus, to begin with.

"As an employer, we paid in thousands of dollars to the unemployment fund over the years specifically for situations like this," said Stovall.

He believes the folks trying to get benefits illegally should face consequences.

"When you get 2, 3, 4 that come in on the same day somebody is funneling this it can't be random," said Stovall. "I think they should be prosecuted if it's at all possible."

A spokesperson with the Kentucky Attorney General's Office sent us an email on the matter, stating in part:

Our office has received more than 100 complaints related to fraudulent unemployment claims. When we receive a complaint, we share the information with the Unemployment Insurance Division of the Labor Cabinet. We have been directed by the Labor Cabinet that the information can only be sent to the Cabinet’s General Counsel, Sam Flynn.

As an outside agency, our office does not have access to the unemployment insurance system and its records. Therefore, we cannot confirm what the Cabinet does once they receive the information from our office.

The AG's office recommends that Kentuckians report the fraud first to Kentucky’s Unemployment Fraud Unit at uifraud@ky.gov or by calling (502) 564-2387. They say the Office of Senior Protection is the best point of contact for Kentuckians to reach the office. People can report fraud or identity theft concerns online by visiting ag.ky.gov/scams or by calling the Identity Theft Hotline at 1-(800) 804-7556.

The following is a Fraud Alert from the Office of Inspector General at the U.S. Department of Labor:

"Be aware that your personal information may be used fraudulently without your permission. Fraudsters are perpetrating numerous schemes related to the COVID-19 pandemic. In one scheme, scammers have offered to help individuals file claims for unemployment benefits. The scammers then ask for personal information including social security numbers and dates of birth. The scammers may ask you to provide payment, or your credit card information, in assisting you in filing or qualifying for your unemployment benefits. You do not need to pay anyone to file or qualify for your benefits. Victims of these scams face potential harm. The personal information the scammers collect may be used to commit identity theft to file fraudulent unemployment insurance claims. Unsolicited calls, social media platforms, and door-to-door visits are several ways that individuals have been targeted."

The U.S. Department of Labor recommends the following steps you should take:

1) Report all allegations of fraud involving unemployment insurance or other U.S. Department of Labor activities or programs, please contact the OIG Hotline by clicking here or (202) 693-6999 or 1-(800)-347-3756.

In addition to reporting to the U.S. Department of Labor above, I would encourage you to report the fraud perpetrated with the use of your social security number to the following:

2) Report your fraud to the U.S. Department of Justice by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or by submitting the NCDF Web Complaint Form. Visit here for additional information.

3) Report to the Federal Trade Commission here. They are linked to the Social Security Administration and the IRS, so this is important for tax purposes.

4) Report Kentucky unemployment insurance fraud by email to Kentucky's Unemployment Fraud Unit at uifraud@ky.gov or by calling (502) 564-2387.

5) You can also contact each of the three credit reporting agencies at the numbers below, to place an initial fraud alert on your account. Be sure to ask each company to only show the last four digits of the social security number on your report to further protect any personal information.

  • Equifax: 1-(800) 525-6285
  • Experian 1-(888) 397-3742
  • TransUnion 1-(800) 680-7289

You can also track scams in your area by clicking here.