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The state owes us an explanation of jobless claims fraud

Gov. Charlie Baker was asked Monday why it was taking so long for th estate to send out unemployment checks.
Gov. Charlie Baker was asked Monday why it was taking so long for th estate to send out unemployment checks.Sam Doran/Pool

First-time unemployment claims fell dramatically last week, the state said Wednesday, a welcome break after more than two months of troubling increases.

Unfortunately, a surge in bogus claims here and in other states is making it hard to know exactly how many people are really losing their jobs and seeking benefits. The Baker administration, by declining to answer some basic questions about what’s going in, isn’t helping matters.

On Monday, Governor Charlie Baker was asked why it was again taking so long for the state to send out unemployment checks. This had been a big problem in the early days of the coronavirus pandemic, when the Department of Unemployment Assistance was overwhelmed as some 826,000 benefit claims were filed in just eight weeks in the spring.

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Baker’s answer was something of a surprise: “There is a tremendous amount of bot-based fraud going on,” he said, referring to software programs that allow crooks to flood the system with claims using stolen personal information.

At least 30,000 fraudulent claims had been flagged just over the previous weekend, the state said, bogging down processing of legit applications for benefits. But how is fraud skewing the data? The Department of Unemployment Assistance isn’t saying.

In a related development, the US attorney in Boston, Andrew E. Lelling, said on Tuesday that his office would hire a prosecutor to focus on unemployment insurance scams, a step taken by other states including Rhode Island and California.

In Louisiana, the state said Wednesday that it would slow down claims processing after receiving an estimated 32,000 bogus filings in the past two weeks and 160,000 overall.

Baker’s comments helped explain why new claims jumped by nearly 10,000 to more than 52,000 in the week ended Nov. 14, a few days before he spoke.

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But how much of that increase, if any, was driven by the bots? The administration wouldn’t or couldn’t say. How long have the bots been bombarding the state’s unemployment insurance system? No answer.

The fresh jobless claims report released Wednesday offered some clues. Filings tumbled by 22,600 last week to almost 29,500, a low level not seen since early October.

But the administration didn’t offer a reason for the decline, the largest since mid-April, when the pandemic-triggered tidal wave of layoffs began to ebb.

So we just have to assume most of the drop came as previously booked claims were rejected as fraud. And since the state doesn’t revise past weekly reports, that reversal is netted out of the latest data, making the decline seem bigger than it would have been if the bogus claims had never been filed.

Here’s another assumption we probably should make: Some portion of the 347,000 filings made between mid-September and mid-November were eventually tossed out. We don’t know how many because the administration, citing ongoing investigations of what appears to be a national fraud scheme, won’t comment.

My best guess is that layoffs resulting in jobless claims are running at more than 30,000 a week, approximately twice the rate they were during the summer lull.

We’ve been here before. In July, the state said it had verified that more than 58,000 claims were phony and that it had recovered $158 million.

But there’s been no disclosure of total suspected fraud in the state, when it has happened, or how much it has robbed from taxpayers.

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Baker’s team can do better than this.