DENVER – Colorado’s Unemployment Fraud Task Force referred 17 cases for criminal prosecution tied to $300,000 worth of alleged unemployment fraud, state officials announced Friday.
The criminal referrals represent the first year of work from the task force, which Colorado launched on March 4 last year in the wake up more than 1 million fraudulent unemployment claims that had been filed by that point in the pandemic.
“The Unemployment Fraud Task Force has worked collaboratively with state and federal agencies to investigate those suspected of defrauding the state’s unemployment insurance program. These are complex cases that take time to develop, and now several cases have been referred to various DA’s for prosecution,” Attorney General Phil Weiser said in a statement, adding there would be more prosecutions to come.
The task force is comprised of investigators with the Colorado Department of Labor and Employment, the Colorado Bureau of Investigation, the Colorado Department of Revenue’s Criminal Tax Enforcement Section, the U.S. Attorney’s Office, Secret Service and the Office of the Inspector General for the U.S. Labor Department.
The early work it did involved preventing more fraud from occurring within the state’s unemployment system, which was plagued by fraud, particularly in the federal pandemic unemployment programs rolled out during the worst parts of the pandemic.
But the CDLE partnered with a company called ID.me to add an identity verification system, which reduced the amount of fraudulent claims and freed up more time for investigators to probe particular cases, the task force said.
In December, the state released an audit that found the CDLE paid out $73 million in fraudulent or potentially fraudulent unemployment claims in the first 14 months of the COVID-19 pandemic.
The audit found there were about 8,200 likely or potentially fraudulent claims that were paid out $73.1 million between March 1, 2020, and April 30, 2021 – including more than $45 million to 3,300 claimants that had several fraud indicators and more than $18 million to about 2,900 claimants with suspicious bank account information.
Another nearly $9 million was paid out to about 1,700 claimants who were actually deceased or incarcerated, another indicator of likely fraud, the audit found.
The task force said Friday the 17 criminal referrals break down as follows: two in the First Judicial District, six in the 2nd Judicial District, three in the 15th Judicial District, two in the 18th Judicial District, one in the 20th Judicial District, two that were referred to the U.S. Attorney for the District of Colorado, and one that was referred to Weiser’s office.
“The task force anticipates a significant number of case referrals to be issued over the coming months,” the attorney general’s office said.
Among the charges people who have been referred for prosecution face are theft, forgery, cybercrime, identity theft, filing a false tax return, and others.
One man prosecuted by the U.S. Attorney’s Office was sentenced to 30 months in prison and ordered to pay nearly $700,000 to the state department of labor and federal government after he pleaded guilty to fraudulently obtaining different types of loans and unemployment benefits.
Another will pay nearly $900,000 to the CDLE and federal government for a similar scheme.
The state said many of the investigations involve people who overstated their wages leading to increased benefits, collected unemployment benefits while they were actually working, or used others’ identities to submit multiple fraudulent claims.