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09/20/2020
Software Flaw Hid Signs of $576 Million State Unemployment Fraud, Officials Say
The Daily Chronicle
The state's Employment Security Department took nearly a year to fix a software flaw that wound up playing a small but significant role in this spring's massive unemployment fraud.
The disclosure comes as the agency shakes up its anti-fraud operations and personnel in the wake of the spring's $576 million unemployment scam.
The software flaw, which ESD said resided in its three-year-old claims-processing system, meant the agency was sending out benefits payments before claims had been run through a so-called discovery process to check for fraud risk.
"Claims were made, claims were paid and then discovery was run," ESD Commissioner Suzi LeVine said during an Thursday interview. Even if unemployment claims were eventually flagged as having a high fraud risk, the sequencing flaw meant "they were already paid," LeVine added.
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