LITTLE ROCK, Ark.- Arkansas Secretary of Commerce Mike Preston announced Tuesday approximately 27,000 Pandemic Unemployment Assistance (PUA) and 10,000 unemployment insurance claims are on hold due to potential fraud.
Governor Hutchinson said anyone can receive a letter that they have been approved for an unemployment claim. The governor then showed a letter he received over the weekend stating he had been approved for unemployment funds. Someone used the governor’s information to file a fraudulent claim.
State officials say both individuals and businesses can receive letters.
Preston said there were also several cabinet secretaries that received similar fraudulent letters.
Hutchinson said if you have been approved but did not apply for unemployment, it was more than likely fraud.
The governor said if he went ahead and signed the letter he received, it would go to the bank account of the person who fraudulently filed the claim.
According to Preston, this is part of a national and international ring trying to defraud the system.
The information is fraudulently obtained and stored. Then bad actors take advantage of the pandemic and file fraudulent claims.
Preston said his department is having to flag more claims than normal.
If the state makes fraudulent payments, Preston says they will have to pay it back to the federal government when audited.
Preston said his department is setting up verification stations and are partnering with other state agencies to verify identities
State officials say if you receive a letter and did not apply for unemployment or PUA, report it. You can email the Arkansas Division of Workforce Services at ADWS.InternalAudit@arkansas.gov, call 501-682-1058 and leave a message if the line is busy, visit www.DWS.arkansas.gov and fill out the secure fraud reporting form and file a police report.
Officials say to be sure to get a copy of the report and provide it to ADWS.
Preston said if you call ADWS, leave a message because they currently have a high volume of calls for reporting fraud and the messages go into their email system.
Preston said law enforcement is looking at multiple angles.
According to Preston, a little over $500 million has been paid out for Pandemic Unemployment Assistance and nearly $1 billion in Pandemic Unemployment Compensation to date.
Preston said at this time, they are not able to say how much as been paid to fraudulent claims. Law enforcement is investigating the issue from multiple angles.
According to Preston, Arkansas has traditionally been good in their fraud rating that the Department of Labor grades on. Preston said Arkansas is one of the lower states on paying fraud and they pride themselves on that.
Preston hopes the backlog will be clear in a couple of weeks.
Everyone that has a hold on their account should receive a letter letting them know the status of their account.