Governor: Kansas pays out $290M in fraudulent jobless claims

    Gov. Laura Kelly said the Kansas Department of Labor paid out an estimated $290 million in fraudulent unemployment claims in the COVID-19 pandemic year of 2020, including $140 million from the state's trust fund and $150 million in temporary federal assistance. (Tim Carpenter/Kansas Reflector)
    Gov. Laura Kelly said the Kansas Department of Labor paid out an estimated $290 million in fraudulent unemployment claims in the COVID-19 pandemic year of 2020, including $140 million from the state's trust fund and $150 million in temporary federal assistance. (Tim Carpenter/Kansas Reflector)

    TOPEKA — The Kansas Department of Labor estimates $290 million in fraudulent claim payments were paid during 2020 through the state’s regular unemployment program and the temporary federal pandemic benefit programs.

    The state’s portion of unwarranted payments during the year amounted to $140 million. The larger portion of fraudulent payments in Kansas from Jan. 1 to Dec. 31, 2020, totaled $150 million through the federal aid programs. State unemployment systems became a magnet for criminal enterprises taking advantage of overwhelmed agencies pushing financial aid to millions of Americans thrown out of work.

    Since March 15, 2020, the state’s labor department paid out more than 4 million weekly claims totaling over $2.7 billion between the regular state unemployment and federal pandemic programs.

    “Fraud is unacceptable and will not be tolerated,” Gov. Laura Kelly said in a statement Tuesday. “It’s stealing from taxpayers at the worst possible time and all attempts at fraud will be referred in the strongest possible manner to law enforcement.”

    Kansas referred 50,300 cases of potential fraud to federal law enforcement agencies for investigation and possible prosecution, the governor’s office said.

    The Kansas Legislature’s division of post audit is scheduled to release Wednesday a preliminary analysis of unemployment insurance fraud in the state.

    Amber Shultz, acting secretary of state Department of Labor, said the expedited congressional response to COVID-19 limited until December the ability of states to take aggressive action to verify claimant information on unemployment filings.

    “Congress opened the door for this historic level of fraud when they created multiple new pandemic-related unemployment programs and at the same time prohibited states from asking basic verification questions,” she said.

    The U.S. Department of Labor’s office of inspector general reported unemployment fraud cost taxpayers $36 million since start of the pandemic in early 2020. During the period, Ohio officials said that state paid out $330 million in fraudulent claims while California reported authorizing $11.4 billion in bogus unemployment payments.

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    Tim Carpenter
    Tim Carpenter has reported on Kansas for 35 years. He covered the Capitol for 16 years at the Topeka Capital-Journal and previously worked for the Lawrence Journal-World and United Press International. He has been recognized for investigative reporting on Kansas government and politics. He won the Kansas Press Association's Victor Murdock Award six times. The William Allen White Foundation honored him four times with its Burton Marvin News Enterprise Award. The Kansas City Press Club twice presented him its Journalist of the Year Award and more recently its Lifetime Achievement Award. He earned an agriculture degree at Kansas State University and grew up on a small dairy and beef cattle farm in Missouri. He is an amateur woodworker and drives Studebaker cars.