Maryland receives more than $2.4 million in federal funding to help combat fraudulent unemployment claims

Maryland received more than $2.4 million in federal funding Tuesday to help fight unemployment insurance fraud during the coronavirus pandemic.

As states continue to grapple with unprecedented numbers of claims to receive benefits form the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs, there has been an uptick in fraudulent activity.


Maryland was awarded more than $2 million for PUA and $388,000 for PEUC as part of a $100 million initiative from the U.S. Department of Labor to help states around the country.

The department said in a news release that states can use the funding for staff or contract services to conduct fraud investigations as well as to implement tools to increase prevention, detection and recovery of fraudulent improper payments.


“The Department of Labor has made preventing fraud and abuse of the unemployment insurance system a top priority,” Secretary of Labor Eugene Scalia said in a news release. “State workforce agencies are on the front lines in the fight against fraud and abuse, and the funding and resources provided by the Department today will help States protect the integrity of their unemployment insurance programs.”

Hundreds of thousands of Maryland residents have become unemployed since restrictions to reduce the spread of the coronavirus went into effect in March.

The problems related to the fraud investigation began in early July, when some people receiving unemployment payments saw their accounts wiped out and their state-issued debit cards frozen with no explanation.

On July 15, Gov. Larry Hogan and state Labor Secretary Tiffany Robinson announced why: Officials had uncovered a massive identity theft scheme involving more than 47,000 fraudulent claims seeking more than $500 million in unemployment benefits. Hogan said those claims came from out of state and were detected over the July Fourth weekend.

Robinson said the division handling unemployment became suspicious when it noticed a surge in out-of-state claims, and the governor said the state put holds on paying out-of-state claims.