It has been revealed that 59 employees of Washington State's Employment Security Department (ESD) had fraudulent unemployment claims made against their own benefit accounts.
In 10 of those cases of stolen identity during the massive fraud scheme in the early days of the pandemic, ESD did not realize what was happening until after it had deposited funds into fraudsters bank account, according to King 5 News.
An audit of the agency found that through the end of June 2020, the ESD had lost $600 million dollars to Nigerian scammers of which they claimed to have recovered only $250 million of the missing funds. ESD said that more had been recovered since June for a total at the time of $357 million. Original estimates placed the loss at closer to $1 billion, though a large amount of the difference was recovered when the fraud was detected.
ESD claimed the fraud was a result of claimants overwhelming their system following the economic crisis caused by Democrat Governor Jay Inslee's COVID restrictions, but the problems existed long before that.
A year earlier, the agency was already having problems despite a $44 million allocation from the legislature specifically to fix and upgrade ESD's computer systems.
The security and identification process ESD had been using for the last few years were proven inadequate to protect the benefits, security and privacy of the accounts and claimants despite the significant investment by the legislature on behalf of the taxpayers of Washington prior to the economic crisis, and ESD failed to correct or recognize the problems. Most importantly, even a computer upgrade failed to account for the "human factor."
The audit found that ESD Commissioner Suzie LeVine had ESD deliberately bypass the waiting period for benefits, and disabled security and verification processes, in order to send out unemployment checks faster. That action was taken by LeVine at the urging of Democrat Governor Jay Inslee. LeVine was a political appointee of Inslee’s who had been a donor to his campaign.
The resulting fraud from LeVine's actions was so widespread that ESD could not even identify when its own employees were targeted by the scammers.
The Washington State Auditor found that ESD "had inadequate controls to prevent the massive unemployment insurance benefit fraud," cataloged other repeated missteps by LeVine and accused LeVine of imposing "significant constraints" on the auditors as they investigated ESD.
Within two weeks of receiving the funding from the CARES Act, $600 million had been stolen from the fund, which was approximately 8 percent of the $8.6 billion paid out in benefits over the summer. The state had to stop all payments for days while it investigated the fraud.
Since March, the state has identified over 122,000 fraudulent claims. As a result of the fraud, thousands of Washington residents did not receive unemployment for months during the financial crisis caused by Governor Inslee's COVID restrictions.
LeVine was rewarded for her incompetence with a position in the Biden administration, as "interim political head" of the Employment and Training Administration (ETA), under the Labor Department, which "administers federal government job training and worker dislocation programs, federal grants to states for public employment service programs, and unemployment insurance benefits," according to their website.
LeVine and her husband donated over $400,000 to the Biden campaign and other Democratic causes and campaigns in 2019 and 2020, according to federal campaign filings.
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