U.S. Foreign Governments Were Involved in Unemployment Fraud, Says Texas Workforce Commission

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AUSTIN, Texas (AP) — Unemployment fraud extends beyond individual offenses. The Texas Workforce Commission discovered crime rings and suspected foreign governments behind the fraud.

TWC Executive Director Ed Serna told Texas legislators that he would not publicly identify the governments under investigation for fraudulent unemployment claims.

He claimed that thieves would switch tactics every six days and attempted to hack into the system using bots. It was discovered by the agency.

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According to Serna, the majority of unemployment fraud stems from people whose identities were stolen in security breaches such as Equifax in 2017.

“During this time, we calculated that $51.6 million was paid out on 9,573 claims that have now been confirmed to be identity theft claims.” The $51.6 million is 0.1 percent of the total $54.3 billion in unemployment benefits paid during this time period. “We also estimate that TWC has saved approximately $2.6 billion in payments to fraudsters,” Serna wrote in his testimony.

Between March and April 2020, Texas unemployment reached 12.6 percent, with 1.4 million jobs lost. By March 2022, the rate in Texas would be 4.4 percent, with less than 3 percent in Austin-Round Rock, Amarillo, and College Station-Bryan.

The appeals process demonstrates the lingering effects of the unemployment surge. TWC also requires more attorneys.

“We’re trying to hire in rural Texas, South Texas, for Austin jobs because the pay is better there than it is in Austin,” Serna explained.

TWC commissioners and the agency are focused on providing qualified workers to employers. The commissioners budgeted $15 million for the creation of a healthcare apprenticeship program. The commission also set aside $4 million to expand apprenticeship programs for other occupations.

An audit of the Texas Workforce Commission reveals security flaws.

The expanded Child Care Development Block Grant will provide nearly $315 million to low-income families in need of child care over the next two years. This money was provided by Congress as part of the federal stimulus package, and it will be distributed by local Workforce Solutions offices.

Lawmakers questioned Serna about the agency’s ability to handle another surge if the United States enters a recession. Serna stated that the tools put in place to deal with the surge, such as the online chat bot and the cloud-based interactive voice system, will remain in place (IVR).

Serna stated that TWC is updating its computer systems, which have been in use since the early 1980s. When the pandemic struck, the agency was in the process of updating its system.

“In July 2019, we issued a Request for Offer to (start) the procurement process.” We were in the final stages of selecting a vendor in March 2020 when the pandemic struck. “I paused the process because I needed the staff in our UI and IT departments working on the system replacement to respond to the pandemic and help run our current system and reprogram it for the new federal benefit programs,” Serna wrote in his submitted testimony.

The agency launched a new procurement process in the fall of 2020 and chose a vendor in January 2021.

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“TWC faced challenges, but we were prepared to respond.” With our customers always in mind, we modified our processes, developed new tools and resources, and fought to protect the funds we are tasked with distributing. While we hope there will be no more pandemics, I am confident that our team will always respond with the same zeal that we have shown over the last two years,” Serna’s written testimony stated.

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