photo by: Screenshot/Kansas Department of Labor

The Kansas Department of Labor unemployment benefits website is pictured Tuesday, Sept. 29, 2020.

Amid a flood of both legitimate and fraudulent unemployment claims following the onset of the coronavirus pandemic, the Kansas Department of Labor estimates that it paid out $290 million in fraudulent unemployment claims last year.

The Department of Labor arrived at that number following an analysis and IRS Form 1099-G reconciliation, according to a news release from the Kansas governor’s office on Tuesday afternoon. More specifically, the release states that in 2020, about $140 million in fraudulent claim payments were made from Kansas’ regular unemployment insurance program, and more than $150 million in fraudulent claims were paid out from federal benefits programs, for a total of $290 million.

“Fraud is unacceptable and will not be tolerated,” Gov. Laura Kelly said in the release. “It’s stealing from taxpayers at the worst possible time, and all attempts at fraud will be referred in the strongest possible manner to law enforcement.”

The Department of Labor, operating with insufficient staff and an approximately 40-year-old computer system, has been inundated with both legitimate and fraudulent unemployment claims since the coronavirus pandemic set off waves of job losses, as the Journal-World previously reported. Though department officials recently told the Journal-World that the office stopped thousands of fraudulent claims per day, some fraudsters have succeeded in filing illegitimate claims or in “hijacking” legitimate claims and getting payments rerouted to their bank accounts.

Kelly said that all 50 states have been overrun with coordinated, sophisticated fraud attempts, and that she wrote a letter with fellow governors calling on Congress to provide funding to secure and modernize unemployment systems. The release says that of other states that have publicly shared their fraud numbers, California has paid out $11.4 billion, Washington $600 million and Ohio $330 million. The U.S. Department of Labor Office of Inspector General estimates that unemployment fraud has cost taxpayers roughly $36 billion nationwide since the start of the pandemic, or about 11% of total unemployment insurance payouts since the start of the pandemic.

Department of Labor Acting Secretary Amber Shultz said in the release that Congress opened the door for such a historic level of fraud with the creation of multiple new pandemic-related unemployment programs and prohibitions that prevented states from asking basic verification questions. Shultz said it was not until the Continued Assistance Act was signed into law on Dec. 27, 2020, that states were able to take more aggressive action to verify claimant information in the federal programs.

Since March 15, 2020, KDOL has paid out more than 4 million weekly unemployment and federal pandemic claims totaling over $2.7 billion. The release states that sophisticated crime rings targeted the unemployment system and that both individuals and businesses have reported identify theft cases. Since the beginning of 2020, KDOL stopped approximately 500,000 fraudulent claims that could have cost more than $22 billion.

As part of its anti-fraud effort, the department has referred over 50,300 cases of alleged fraud to federal law enforcement partners for investigation and possible criminal prosecution and is working with the FBI and other federal agencies to hold fraudsters accountable, the release said.