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FRANKFORT, Ky. — The extensive and expensive nature of unemployment insurance fraud across the commonwealth has prompted the formation of a task force.

Gov. Andy Beshear earlier this week signed an executive order creating the Kentucky Unemployment Insurance Fraud Detection and Prevention Task Force — a multi-agency panel that will coordinate between state and federal entities to detect, investigate, prosecute and prevent unemployment insurance fraud in Kentucky.

Fraud investigation: Three Henderson County officials report identity theft, false unemployment claims

“Like many other states across the country, Kentucky has seen a surge in fraudulent unemployment insurance claims,” Beshear said. “This task force will bring together the needed resources to combat this scourge.”

During the current pandemic, the entire United States has seen an increase in fraudulent claims for unemployment insurance. To date more than $63 billion in fraudulent benefits has been paid nationwide. 

In Henderson County within the last several weeks, Henderson County Judge-executive Brad Schneider, County Attorney Steve Gold and County Magistrate Beth Moran have all been victims of someone stealing their identities to file for unemployment insurance.

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During a recent meeting of the Henderson County Fiscal Court, Schneider said information he’d received is that roughly 50 percent of unemployment insurance claims are fraudulent, and the situation is a growing quandary. 

“Be watchful,” he said. “By the end of this year, and when we get into the next tax season, this is going to be a huge headache. A mess. And the state has barely touched on it.” 

After the announcement of the fraud task force, Schneider said, “I support anything he can do to help fix the problem. Thousands of innocent Kentuckians have been caught up in this criminal scheme. 

“They need some clarity and reassurance from state government that these cases will be cleared and victims won’t be adversely affected.”

The fraud task force members appointed by the governor include top officials with the Kentucky State Police, Kentucky Department of Homeland Security, Kentucky Transportation Cabinet and the Kentucky Office of Unemployment Insurance.

Additionally, the task force may include representatives from the U.S. Attorney’s Offices for the Eastern and Western Districts of Kentucky, the Federal Bureau of Investigation, the U.S. Department of Homeland Security, the U.S. Secret Service, the Office of Inspector General for the U.S. Department of Labor, the U.S. Diplomatic Service, the Kentucky Office of the Attorney General or other investigative entities the governor may deem appropriate.

More changes

In an ongoing effort to address the high volume of fraud claims, the state’s Office of Unemployment Insurance (OUI)  added a new welcome screen to the claimant website with a more secure login. OUI has also updated the fraud form to report identity theft on the site, entered into a new partnership with ID.me, implemented reCaptcha and adopted new measures for out-of-state Pandemic Unemployment Assistance, putting a hold on those claims until identification can be verified.

Most recently, OUI announced it was stopping all claimants from making changes to the bank account information on file with the agency. This occurred due to claimants reporting unauthorized changes have been made to their bank accounts.

To help tighten security, the agency will soon require new and existing claimants to create more complex PIN numbers. All new UI claimants will also only be paid by paper check effective immediately, officials said.

At the federal level, the U.S. Department of Labor launched a new website to educate the public about the growing problem of unemployment identity theft and provide reporting guidance for citizens in every state.

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