Tech Firm Made Up Unemployment Fraud Numbers to Win Contracts: Report

Tech Firm Made Up Unemployment Fraud Numbers to Win Contracts: Report

Kacper Pempel

In the summer of 2021, a relatively unknown tech firm publicly called claimed that roughly half of all emergency unemployment benefits provided during the Covid-19 pandemic – totaling at least $400 billion – had been stolen. According to a new report from Democrats on the House Oversight committee, the claim was fictitious, and part of an effort by to win government contracts to provide high-tech identity verification services.

The false claim certainly gained plenty of news coverage. Axios, for example, cited the claim in reporting that “Unemployment fraud during the pandemic could easily reach $400 billion, according to some estimates, and the bulk of the money likely ended in the hands of foreign crime syndicates — making this not just theft, but a matter of national security.”

For sure, there was significant fraud in the unemployment program during the pandemic, driven in large part by a huge surge of funding flowing through outdated and overwhelmed payment systems at the state level. But the level of fraud claimed by was anywhere from three to 10 times the size of government estimates.

The lawmakers also found that verification services provided to at least 25 states by were faulty, delaying the processing of some unemployment claims while blocking payments on others. “The Committees’ investigation uncovered appalling new information about how’s identity verification services delayed benefits for Americans when they needed them most,” committee chair Rep. Carolyn B. Maloney (D-NY) said in a statement. “I am also deeply concerned about providing inaccurate information to federal agencies in order to be awarded millions of dollars in contracts.”

For more on the story, see reports at Bloomberg, Politico and Reuters.