COLUMBUS, Ohio — The state of Ohio paid out millions of dollars in unemployment to fraudulent claims, while also overpaying some legitimate claims in nonfraudulent cases.
That’s according to a report from the auditor of state. The report notes that between April 1, 2020, and June 30, 2021, the Ohio Department of Job and Family Services paid out $477 million in fraudulent employment benefits. It also overpaid more than $3 billion in non-fraudulent cases.
'How does this end?'
Sisters Kathy Busch and Kristin West head up Kemper House, a family-owned, family-run assisted living facility for memory care patients, those with Alzheimer’s or dementia.
“I got letters in the mail from two, I think, two or three different people from the state […], from the unemployment bureau and claiming him as the employer,” Busch said.
Those letters, which came address to her husband Michael last year, included “names that we didn't obviously know and that they were owed unemployment on his name.”
Michael doesn’t own a business and never has, so it didn’t make much sense for a claim to be filed naming him as an employer. His wife feared her husband’s identity was at risk from this.
“I know it's public record, but you don't want to think that,” Kathy Busch said. “And so that's the kind of thing that you first freak out about. Truly, I mean, at least I did.”
She was also frustrated by the lack of answers and the difficulty of reaching anyone by phone to dispute or report the fraud.
“There was no way to contact and that's all I wanted. I wanted to say, ‘OK, and can you tell me what to do and how does this end?’” she said.
The Kemper House company attorney gave the sisters some advice: “Write out big letters: ‘Fraudulent claim, fraudulent claim.’”
“And we faxed it,” Busch said.
Since then, Busch said she’s gotten nowhere on the phone and that they hadn’t received anything in the mail to indicate whether the situation has been resolved. She said she assumes it was taken care of.
'I fear we'll end up paying for that'
Busch and West are considered employers, due to their positions at Kemper House. For them, the bad luck of being a fraud victim came twice: once on a more personal level with Michael, then on a more professional level by being an employer.
“We actually got it from both ends, because we were seeing it from our employees coming in and saying, ‘I got this paperwork. I didn’t, I used to work for you guys. I didn't quit. I don't work anywhere else. What? How, how can you help me?’” said West, director of operations for Kemper House.
They also got unemployment claims not only for current employees but also people who never worked at Kemper House or who hadn’t worked there in years.
Even the sisters’ father, a resident at Kemper House, was the target of fraudulent claims.
West said because the state lost so much money as a result of unemployment fraud, she worries business owners like her family may be affected.
“And we did everything we were supposed to do. They didn't hold up their end and then, but we'll end up—I fear we'll end up paying for that,” West said.
Paying how is a different question. West is already frustrated at the amount of time they had to spend on dealing with fraudulent claims.
“It took hours of our time responding to these claims for people that did not work for us, had not worked for us in years, never worked for us, and so that was very difficult. We couldn't get through to anyone. And it was challenging for us. It was very time-consuming,” West said.
She added, “We shouldn't have had to, you know, focus on this. We have residents that need us.”
If you receive a 1099-G form
ODJFS is now starting to issue 1099-G tax forms to people who received unemployment benefits. To prevent the forms from being issued to victims of identity theft, the department said it notified about 955,000 Ohioans last month that applications for benefits were filed under their name.
If you get a 1099-G form in the mail and did not apply for unemployment benefits in 2021, the agency urges you to report your identity stolen on its website (click on the red “Report Identity Theft” button) or by phone at 1-833-658-0394.
If your identity was stolen and used in one of these fraudulent claims, you do not have to fill out a 1099-G. Only actual recipients of unemployment benefits must file a 1099-G form to report their unemployment income when filing their annual taxes.
The agency still recommends consulting with the IRS or a tax advisor.
Olivia Fecteau is a reporter at News 5 Cleveland. Follow her on Facebook and Twitter.