Oklahoma City Public Schools has seen a 275% increase in fraudulent unemployment claims this school year over the previous school year 2018-2019.
But, so far the district has managed to identify and interrupt the schemes before they lost money in payouts.
It is a part of a larger wave of attempted unemployment fraud in the state and across the nation during the COVID-19 pandemic that has even created massive legitimate unemployment claims in Oklahoma and across the U.S.
“It’s unprecedented,” attorney Brandon Carey told Free Press. “We’ve never seen anything on this large of a scale with regard to fraudulent activity.”
Carey is a staff attorney for the Oklahoma School Boards Association who is under contract to handle unemployment claims on the district side even under normal circumstances.
“During the past several weeks, similar to other Oklahoma companies and organizations, Oklahoma City Public Schools has experienced a significant increase in unemployment claims filed,” said district spokesperson Crystal Raymond in a written response to our questions about their experience so far with unemployment fraud.
“Many have been determined to be fraudulent, which means that a claim was fraudulently filed using our employee’s name and social security number.”
“The district has seen an increase of approximately 284% in total claims filed and an increase of approximately 275% in fraudulent claims since the 2018-2019 school year,” a portion of the district statement read.
Measures are taken to contact the employee whose name has been used once the Oklahoma Employment Security Commission notifies the district of filings. That part is a usual process to cross-check information.
But in this case, the volume is radically higher because of the fraudulent claims flooding the state unemployment system.
Cary believes that the volume of the claims is a sign of large operations with the resources to make thousands of claims in a short amount of time with stolen identity data.
“Basically these big data breaches that you’ve seen companies like Equifax and Target — these people get people’s data and sell it on the dark web,” said Carey. “And this is one way those people that buy it, try to get money.”
He said “the first couple of weeks, all the claims were legitimate.”
“[But, then] the people trying to commit fraud just exploded,” Carey told us. “Eighty to 90% of our claims are fraudulent right now. And that doesn’t even count the wage forms that are fraudulent.”
Two sides of the solution
Both Raymond and Carey said that they inform employees to contact the fraud department individually, make a police report, and contact the credit bureaus to head off any credit being taken out in their name.
The district also plays an active role in stopping the fraud.
The commission sends letters to the district once a claim has been filed.
In normal circumstances, an employee who qualifies for unemployment gets paid “about $500 per week” according to Carey until they find new employment. They are under strict rules to actively seek employment while they are receiving benefits.
The district then has to pay for the unemployment until the former employee finds work.
The key to stopping financial damage to the district is to act quickly to verify the claim once they get notice.
The employee is then contacted to verify whether the claim is one they actually made. And, if they didn’t, they make a formal statement that they did not leading to the district contacting the commission’s fraud department.
If the district acts fast enough, then the payment can be intercepted before it goes out and the district is billed.
Crush of claims
At Governor Kevin Stitt’s news conference Wednesday, David Ostrowe, Secretary of Digital Transformation, called the levels of claims “astronomical.”
He has been tasked with helping the Oklahoma Employment Security Commission gear up to handle the radical increase in even legitimate claims hitting their system during the economic crash after the COVID-19 pandemic made its way to the United States.
“We have people that are gaming us,” said Ostrowe. “We have some fraud.”
He said they had identified “about 6,700 claims that we deemed as fraud.”
He said the commission has contacted the FBI to further identify who is behind the large number of fraudulent claims and possibly another large group of fraudulent claims they think they have identified.