AUSTIN, Texas — Unemployment fraud goes beyond individual crimes. The Texas Workforce Commission found crime rings and some foreign governments may be behind the fraud.
TWC Executive Director Ed Serna told Texas lawmakers he would not publicly name the governments being investigated for fraudulent unemployment claims.
He said thieves would change tactics every six days and tried using bots to hack into the system. The agency caught it.
Serna said the majority of unemployment fraud came from people who had their identity stolen in security breaches, such as Equifax in 2017.
“We have calculated $51.6 million was paid out during this time on 9,573 claims that have now been confirmed to be identity theft claims. The $51.6 million represents 0.1% of the total $54.3 billion in unemployment benefits paid during this time. We also estimate TWC has prevented about $2.6 billion in payments being paid out to fraudsters,” Serna wrote in his testimony.
Texas unemployment hit 12.6% between March and April 2020 with 1.4 million jobs cut. By March 2022, the rate fell to 4.4% across Texas and less than 3% for the Austin-Round Rock, Amarillo and College Station-Bryan areas.
The lingering effects of the unemployment surge can be seen in the appeal process. And TWC needs more attorneys.
“We’re trying to hire in rural Texas, South Texas, for Austin jobs because Austin pay there is better than Austin pay in Austin,” Serna said.
TWC commissioners and the agency are focused on getting employers qualified workers. The commissioners set aside $15 million to develop a healthcare apprenticeship program. The commission also allocated $4 million to expand the apprenticeship programs for other jobs.
Over the next two years, nearly $315 million from the expanded Child Care Development Block Grant will go to low-income families needing child care. That money came through federal stimulus legislation passed by Congress and will be distributed by local Workforce Solutions offices.
Lawmakers asked Serna if the agency could handle another surge if the U.S. enters a recession. Serna said tools implemented to handle the surge will stay in place, such as the online chat bot and the cloud-based interactive voice system (IVR).
TWC is updating its computer systems, which have been in use since the early 1980s, Serna said. The agency was in the process of updating its system when the pandemic hit.
“We issued a Request for Offer in July 2019 to (begin) the procurement process. In March 2020, we were in the final stages of selecting a vendor when the pandemic hit. I put the process on hold because I needed the staff in our UI and IT departments who were working on the system replacement to respond to the pandemic and help run our current system and reprogram it for the new federal benefit programs,” Serna wrote in his submitted testimony.
The agency began another procurement process in fall 2020 and selected a vendor in January 2021.
“TWC faced challenges, but we were up to the task to respond. With our customers always at the front of our minds, we modified our processes, created new tools and resources, and fought to protect the funds we are charged to distribute. While we hope we won’t have another pandemic, I am confident our team will always respond with the diligence we have during the past two years,” Serna’s written testimony showed.
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