The $434 Million ”Oops…”

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This fraud of the day chronicles a commendable investigation by ABC15 of Arizona. Compelled by the plight of the state’s unemployed, who have had an increasingly difficult time making ends-meet, the investigators obtained records showing that ”many people receiving benefits in Arizona are not eligible – and are cheating the state.”

According to U.S. Department of Labor statistics, Arizona paid out more than $434 million to people who don’t qualify for benefits during the last three years – making the state one of the worst for improper payments (or one of the best to permeate if you’re a fraudster). Though ABC15’s reporters asked U.S. Department of Labor Officials as well as the head of Arizona’s unemployment division for an explanation, they only received excuses. Folks, can the state of Arizona afford excuses?

In the state’s defense, Arizona officials noted that it later recovered in $20 million in fraudulent payments to ineligible applicants – but that simply doesn’t cut it. Let’s do the math: $434 million divided by $20 million means that it would take 21.7 years to recover an amount equivalent to the improper payments they’ve made in the last three years. And how does Arizona plan to prevent improper payments from being made in the future? ”Arizona is one of four states receiving a combined total of $72 million in grant money from Washington, D.C. for an improved unemployment system,” the ABC15 reporters note. The improved system should be able to help gather and filter information more accurately.

Source: Today’s ”Fraud of the Day” is based on “Hundreds of millions in unemployment benefits paid to the wrong people” by Maria Tomasch and Lori Jane Gilha for ABC-15 Arizona, November 7, 2011.

For many unemployed Arizonans like Ashley Purviance of Chandler, becoming unemployed is a horrible, sometimes hopeless feeling. “What am I going to do for money? Who is going to hire me?” she wondered.

Ashley recently applied for unemployment insurance benefits to help make ends meet, but is having a very difficult time getting the help she needs.

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