State audit finds Colorado improperly paid up to $73 million in unemployment benefits

A Colorado state audit found that as much as $73 million worth of unemployment benefits was fraudulently distributed.

During the first year of the pandemic, Colorado saw a 1,100% increase in unemployment claims, leading to $73 million, leading to 852,000 Coloradans receiving $6.9 billion in unemployment benefits. However, up to $73 million was distributed to people who didn’t qualify for the money. 

According to the state audit, $3.87 million was paid to 1,065 deceased persons, $5.04 million was distributed to 696 incarcerated individuals, and $101,630 was given to 18 people who were not working age and, thus, ineligible. Another $18.5 million was paid to 2,019 people whose claims had suspicious bank account information and $45.78 million was sent to 3,308 claimants who submitted claims with multiple indicators of fraud.

Additionally, the Department of Labor and Employment was unable to prove that around 73% of claimant requests for help with fraud holds were resolved. The audit found that it took the department around seven weeks for 70,134 fraud hold assistance requests to be marked as resolved.

The audit reported, “(I)t might take years before (the state) has final statewide and nationwide totals for fraudulent payments,” the audit stated. Colorado’s Department of Labor and Employment has said the amount of unemployment insurance fraud here is sure to increase “as we continue to investigate and verify.”

On Monday, the state legislature’s Audit Committee met to hear the results of the audit, but held a follow-up discussion in private. State Rep. Dafna Michaelson Jenet (D-Commerce City) told the Denver Post, “My message to fraudsters is, go find another state. I’m feeling very confident about the new tools we’re going to be using and about how they’ll not only be able to help us resolve current open claims, but prevent future ones.”




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