The Numbers of Victims Yet Unknown

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Unemployment claim form on an office table.

Despite good intentions to aid those hurting due to the COVID-19 pandemic, the more than $5 trillion approved for the CARES ACT, ended up really helping fraudsters. The total amount stolen from the federal aid program is yet unknown, but the Labor Department estimates there could have been “at least” $163 billion in unemployment-related fraudulent payments.

The COIVD-19 Fraud Task Force is focused on finding the fraudsters to recapture the stolen funds. But what about assistance for the victims of stolen identities used in the fraud, such as the Ohlsen family in Albuquerque, NM?

Early 2021, Sara Ohlsen received a debit card in the mail in her husband’s name for unemployment benefits. The problem was, he had never filed for it. The Ohlsen’s refused to activate the debit card and for weeks they called and left messages with the Department of Workforce Solutions, the cabinet secretary, and the fraud tip line. They filed online explaining that Mr. Ohlsen had not filed for unemployment and that this was identity theft and fraud. No one returned their calls, but since they did all the right things in communicating the fraud, they the issue was resolved.  Until a year later when they got a 1099 form for nearly $16,000 in unemployment benefits.

The Olsen’s contacted the Attorney General’s Office and an employment lawyer seeking help, only to be told to call the governor and state politicians.  The Olsen’s have no answers and it looks like no resolution, facing the possibility of paying taxes on $16,000 they never received.  Even worse, to avoid penalty from the IRS if they don’t pay the taxes on the unearned benefit, the Ohlsens will have to withdraw funds from their retirement.

The Ohlsen’s are only one of many victims of stolen identity in this pandemic who will not be able to find the right help. The numbers are yet unknown. Solutions need to be set up to quickly differentiate legitimate individuals from bad actors, or the hardships our victims face will only get worse.

Today’s Fraud of the Day is based on an article “Family stuck with taxes for fraudulent unemployment funds” published by KRQE News on January 31, 2022

The state is demanding that an Albuquerque family pay taxes on unemployment funds they never received, and they believe other families are stuck with the same problem. The headache for the Ohlsens kicked in last year when a debit card arrived in the mail, filled with unemployment benefits they didn’t ask for.

“It turned out the EPPI card is for the unemployment benefits, which I thought was funny because my husband was still employed,” said Sara Ohlsen. “I looked at him and asked him, ‘when did you apply for unemployment benefits,’ and he said, ‘I didn’t,’ and I said, ‘well we’ve got a problem.’”

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.