Add another infraction to the list of New York’s crime problems: fraud. A report recently released by the state’s comptroller found that, in the first year after the Covid pandemic hit, the state paid out at least $11 billion in fraudulent unemployment claims.
That staggering sum reflects one state’s worth of fraudulent claims in one year. And the fraud’s far-reaching consequences will continue to hurt businesses while exacerbating inflation for families.
The report notes the explosion of unemployment insurance payments when lockdowns shut down most of the economy. From April 1, 2020, through March 31, 2021, the state paid out more than $76 billion in unemployment claims — a more than 31-fold increase from the previous year.
The skyrocketing caseloads, coupled with New York’s generations-old UI computer systems, led to widespread fraud. During that same 2020-2021 period, the estimated fraud rate more than tripled to 14.48 percent, up from just 4.51 percent the prior year. Multiplying the 14.48 percent fraud rate by the amount paid out in benefits yields an estimated total fraud of just over $11 billion.