After massive fraud, tech official calls for overhaul of Illinois unemployment system

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As cases of fraud continue to plague Illinois’ unemployment benefit system, a technology official said the state needs to overhaul the program immediately.

The Illinois Department of Employment Security said close to $15 million has been paid to fraudsters, but that doesn't include identity theft-related unemployment fraud.

Haywood Talcove, the CEO of LexisNexis Risk Solutions Government Group, said given the state has paid out $23 billion in benefits, it is likely Illinois has lost $1 billion to criminals.

“The failure to have an identity fraud solution, which they still don’t have today, would have cost the state maybe a million bucks and they would have saved over $1 billion,” Talcove said.

The state’s unemployment spiked last year when Gov. J.B. Pritzker issued executive orders effectively shutting down many businesses to indoor service for weeks in an effort to reduce the spread of COVID-19.

As the rest of the state gets back to business, IDES offices continue to be closed to the public.

In July, the Illinois Auditor General released an audit of IDES for fiscal year 2020. It showed IDES gave money to people who had died, kids, and people who never existed.

IDES officials released a statement after the audit and said they were already working on changes.

“It is no surprise that in states across the country the PUA program has been the epicenter for widespread fraud and overpayments, not to mention the issues legitimate claimants may have accessing the system,” the statement said. “The Department agrees with the auditors recommendations and has already been working to make improvements to the program that address the recommendations based on the department’s own internal reviews.”

Senate Republicans are calling for a broader audit of IDES and accusing Pritzker’s administration of trying to hide the true scope of the problems.

Talcove said the state should be monitoring the web for potential schemes.

“On the ‘Dark Web' explains how to get passed the Illinois Department of Employment Services tools to get a benefit paid,” Talcove said. “They should know about that before I know about that.”

Talcove said Illinois would benefit if state officials worked with the private sector to upgrade computer systems and procedures, which would eliminate much of the fraud.

He warned lawmakers during a cybersecurity hearing in July that scammers who made a fortune defrauding the state are not going to stop with unemployment benefits.

Talcove said with the COVID-19 delta variant gaining steam and an uncertain economic future, Pritzker needs to fix these issues before the next crisis.

“It is really going to take his leadership to get in there and really get this thing cleaned out, or they are going to continue to squander public funds,” Talcove said.

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