Officials at the state agency which hands out unemployment benefits to laid-off workers say they’ve detected a new kind of fraud that’s resulted in the loss of thousands of dollars from the state unemployment trust fund. Iowa Workforce Development Director Teresa Wahlert says perpetrators set up fake companies and then “lay off” fake employees who collect unemployment.
Wahlert calls it a whole new field for fraud investigation. “One of our new strategies is not only to pursue fraudulent claims against the trust fund, but also to pursue fictitious companies,” Wahlert says. A new fraud detection system is helping to detect the fake companies before they can collect any benefits, according to Wahlert.
“So far, between August and November of this year, we’ve found 13 fictitious employers,” Wahlert says. In one day alone, eight phony companies registered with the state using the same IP address. Wahlert says the new system has helped prevent half a million dollars in fraudulent unemployment claims.