DETR says it is investigating fraud

Nevada’s employment bureau warned the public Friday it is investigating fraudulent unemployment claims, though the exact scale of the problem remains somewhat murky.

The Department of Employment, Training and Rehabilitation is aware of “large and active efforts” with organizations and people to defraud the unemployment system, Employment Security Division Administrator Kimberly Gaa said at a Friday news conference. She said the department can’t get into specifics during ongoing investigations.

Fraud is a felony, and the state will prosecute those it suspects of scamming the benefits system, Gaa said.

“Nevada takes fraud very seriously,” she said.

Potential fraud appears to be more prevalent in the benefits program for independent and gig workers, Pandemic Unemployment Assistance, DETR Chief Economist Dave Schmidt said. The department is seeing more than 15,000 new claims on a daily basis, he said.

Additionally, nearly 34,000 PUA claims were filed for February, when the first COVID-19 case wasn’t detected in Nevada until March, Schmidt said.

“Given the estimates of self-employment in Nevada range from about 85,000 to potentially 150,000-200,000, the rapid increases that we’re seeing in PUA seems to exceed the number of people who would we would expect to be eligible for this program,” Schmidt said.

DETR reported it paid out 89 percent of traditional unemployment benefits weekly benefits claims for the week ending June 13. More than 51,000 claims weren’t paid because they weren’t filed for the week, according to DETR data. An additional 24,970 traditional claims have pending issues. Some of those claims may not be paid due to fraud suspicions, Schmidt said.

About 67 percent of the 141,783 eligible PUA claimants had been paid as of Thursday, down from 74 percent of the 106,667 eligible claims the previous week, according to DETR data.

Schmidt said DETR has paid $4 billion in benefits since the start of the pandemic. DETR will borrow money if it exhausts its trust fund, which has about $950 million remaining.

Friday’s news conference was the first since former director Heather Korbulic resigned from the post June 19. It remains unclear when the department will feature a new director. Gaa referred questions about a new director to Gov. Steve Sisolak’s office.

A request for comment from the governor’s office was not immediately returned. At a Wednesday press conference, Gov. Steve Sisolak said a new director would be named as soon as possible.

Korbulic cited threats to her safety in her resignation.

“While we are sad to see Director Korbulic go, we understand why she made this decision,” wrote DETR spokeswoman Rosa Mendez in an email. “The Department will continue to work closely with the Governor’s office and other stakeholders to ensure the seamless service delivery to Nevadans.”

Gaa said PUA and traditional unemployment benefits call centers will be open July 3 but closed July 4.

Contact Mike Shoro at mshoro@reviewjournal.com or 702-387-5290. Follow @mike_shoro on Twitter.