Up to $8.5 billion in fraudulent unemployment claims paid by Michigan, report states

Michigan's Unemployment Insurance Agency on Wednesday reported paying as much as $8.51 billion in fraudulent claims during the COVID-19 pandemic.

The state paid $8.4 billion–$8.51 billion to potential scammers from March 1, 2020, to Sept. 30, 2021, according to a report prepared by Deloitte for the agency. Michigan did, however, avoid paying about $43.7 billion in fraudulent claims during that period of time.

Since October 2020, less than 1% of claims paid by the state were determined to be fraudulent. 

In response to the report, Gov. Gretchen Whitmer (D-Mich.) on Wednesday permanently established the Unemployment Insurance Fraud Response Team. 

Unemployment Insurance Agency Director Julie Dale stated in a press release, "Our diligence in identifying fraudulent claims proves that we now have effective processes to identify criminals who steal benefits from unemployed workers and Michigan taxpayers."

Whitmer also touted what she sees as the agency's success in identifying bad claims. "While we are seeing increased success in identifying and stopping fraudulent claims, we cannot let up. We owe it to workers to make sure this jobs resource is available when they need it the most," she said.

"It's extremely disheartening that bad actors have defrauded the much-needed benefits intended for hard-working Michiganders and the scale of their actions is stunning," Dale said. "We have been successful over the past year in limiting the percentage of cases that are fraudulent to less than 1 percent, but we will never stop fighting for our workers." 

Of all fraudulent claims paid in Michigan, more than 97% came out of federal funds. 

Fraud exploded nationwide during the COVID pandemic when at least $87 billion in federal unemployment benefits were paid "improperly." This means Michigan alone may account for nearly 10% of all fraudulent claims paid nationwide throughout that time.