Fact Finders: “Hundreds of thousands” of fraud claims flagged by AZDES

TUCSON, Ariz. (KOLD News 13) - Criminals continue to take advantage of the COVID-19 pandemic through scams, scare tactics and unemployment benefits.

The Arizona Department of Economic Security said it has seen an influx in fraudulent claims with “hundreds of thousands” flagged as potential fraud.

KOLD News 13 has received several reports of apparent fraud through the system.

One viewer shared a letter she received in the mail with information about her claim. However, she is employed and never filed for any assistance through the Pandemic Unemployment Assistance program.

A man in Illinois reached out to KOLD News 13 after he received a Bank of America card in the mail with information on how to activate it from DES. The man, who lives in the Chicago-area, said he’s never lived or worked in Arizona.

Lou Molinari received a letter from DES confirming unemployment benefits he never applied for.

“Surprisingly enough, yesterday I received a letter from the state of Alabama where i guess I filed for unemployment again,” Molinari told azfamily.

DES Deputy Press Secretary Brett Bezio said the department had received about 36,120 referrals of potential fraud, as of August 5. In an email to KOLD News 13, Bezio said 9,544 of the referrals had been confirmed, 892 had been ruled out and 25,684 were pending review.

Bezio said the department does not have data available specific to out-of-state individuals affected by fraud. “If a payment is made on fraudulent claim, DES works diligently and quickly to recoup any funds that were paid,” Bezio wrote.

According to the state, since the PUA eligibility criteria was set in federal legislation and guidance did not require proof of employment or base period wages, criminals were able to target a much larger portion of the population to steal their identify and file for benefits back to February 2, 2020.

As of Monday, August 17, this message was posted on the top of the DES website:

“As part of its increased fraud detection efforts, DES closed accounts with suspicious account information and activity located out of state. The majority of claims identified are believed to be fraudulent. Whenever additional fraud detection and prevention measures are put into place, there will be a small portion of individuals eligible for benefits who may be impacted by these measures. These individuals will still be able to access benefits. Impacted cardholders who believe they are eligible for benefits should contact DES directly at AZUIFraud@azdes.gov. Once a case is validated as not being fraudulent, a new card will be issued to the claimant and the funds will be reloaded.”

You can report fraud through the DES Fraud Hotline at 1 (800) 251-2436 or (602) 542-9449.

You can also file a report here.

In June, Attorney General Mark Brnovich warned Arizonans about unemployment insurance fraud claims that could be related to possible identity theft.

According to the AG’s Office, if you receive a letter or debit card in the mail for unemployment benefits and you did not file for unemployment, you should immediately:

Destroy the debit card you received after you report the fraud to Arizona Department of Economic Security.
File a criminal complaint with the Arizona Attorney General’s Office online or by calling (602) 542-8888 or (520) 628-6504.
File a complaint with the Arizona Department of Economic Security.
Alert your employer and Human Resources Department and ask them to flag any notice that comes from DES about a claim filed under your name.
File a complaint with the FTC at IdentityTheft.gov. The FTC can also help with a one-year fraud alert on your credit, get free credit reports, and close fraudulent accounts in your name.