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NYSAC: County employees fall prey to unemployment fraud

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Sat, Mar 6th 2021 11:20 am

Counties raising concerns as employees and officials of all levels are victimized

Submitted by the New York State Association of Counties

Identities are being stolen and funds are being misspent as COVID-19 unemployment insurance fraud grows almost every day. Counties across the state this week are raising concerns that county employees’ personal data has been used to file for, and collect, COVID-19-related unemployment insurance. And they are including this warning: If you suspect fraudulent unemployment insurance activity you should immediately report it to the New York State Department of Labor at dol.ny.gov/report-fraud.

“This has got to stop now. All levels of government need to be engaged in preventing this despicable abuse of a system meant to help families in need during this terrible pandemic,” New York State Association of Counties Executive Director Stephen J. Acquario said. “County employees and residents alike need to be aware and take steps to protect their identities.”

For many New Yorkers, the enhanced COVID-19 unemployment insurance benefits have been a lifeline and helped them pay their bills, put food on the table and support their families, but for others it has become a soft target to exploit.

While most counties have not suffered a direct data breach of county systems, scammers have found the personal information they need on the dark web from data stolen in prior data breaches of private sector entities, including insurance companies, credit agencies, credit card companies and other businesses.

“We are protecting county IT systems, but this data has been lifted using nefarious means from other sources,” said Clinton County Administrator Michael Zurlo, who has a family member whose information was used to collect unemployment benefits. Zurlo is a NYSAC vice president.

Nationwide, it is estimated tens of billions of dollars in unemployment benefits have been stolen by small-time criminals, fraudsters, incarcerated felons, and large organized crime syndicates within the U.S. and overseas. To make matters worse, millions of victims nationwide are now receiving 1099 forms from the IRS telling them they owe federal income taxes on unemployment insurance benefits they never received.

While the New York State Department of Labor has greatly improved their fraud monitoring and program integrity efforts, they have identified over 500,000 fraudulent claims, a number that continues to grow every day.

Last week, New York launched a new identity verification tool, ID.me, to help fight unemployment fraud and speed the processing of claims.

New York state has also developed several educational tools to help individuals protect themselves against identity theft and to also report potential unemployment fraud that can be found here.

County officials have been proactive in trying to stop these scammers and are working closely with the Department of Labor to stop fraudulent unemployment insurance activities as well as local sheriffs, police and federal law enforcement agencies to find these criminals, recoup stolen tax dollars and bring those responsible to justice.

“It is extremely disturbing to have your personal data hijacked,” said Oswego County Administrator Phil Church, whose identification was stolen and used to defraud the COVID-19 unemployment benefits system. “To see how prevalent this is right now should put New Yorkers on high alert. These benefits are critical for thousands of New Yorkers, so the state needs to tighten security measures to make sure that this type of theft stops now.”

The New York State Association of Counties is a bipartisan municipal association serving all the counties of New York state, including the City of New York.

Organized in 1925, NYSAC's mission is to represent, educate, serve and advocate for member counties and the elected and appointed county officials who serve the public.

For more information, visit www.nysac.org.

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