Employers react to state temporarily shutting down unemployment system because of fraud

Posted at 6:38 PM, Apr 09, 2021

LEXINGTON, Ky. (LEX 18) — The state has shut down its unemployment system for four days because of fraud. That's not the news thousands of people want to hear, while still waiting for their benefits.

We've shared many of those struggles and now we're getting the employers' perspective and the challenges they experience.

"We've had more fakes than we had employees at the time we closed," said Howard Stovall.

That was in February when we spoke with employers like Howard Stovall, who kept getting fake unemployment claims on the Kentucky Theatre in Lexington.

He said the fraud was rampant long before then and questions why the governor waited until now to temporarily shut down the system.

"I think it should have been done months ago but better late than never," said Stovall.

Governor Andy Beshear said there have been massive fraud attempts that are widespread and likely from overseas.

Those investigating the fraud say it's into the millions of dollars. "Businesses pay every month into the unemployment fund so when somebody is stealing from it they're stealing from us," said Stovall.

The owner of Red State BBQ, Dave Carroll, gets fake unemployment claims, then must spend valuable time notifying the state the information is fraudulent.

David Carroll said he can see why the state is just now shutting down the system. "There was a lot to unravel there going back until March of last year," said Carroll.

He said two fake claims cost him $7,000, but he's moving forward and trying to fill six positions.

"It's not easy. Let's face the facts. You've got stimulus packages being extended and unemployment benefits being extended, so there's not a lot of incentive," said Carroll.