What organizations need to know about unemployment fraudAnchin in the NewsOctober 29, 2021
Brian Sanvidge, Leader of Anchin's Regulatory Compliance and Investigations Practice, sat down with the Journal of Accountancy to discuss what organizations need to know about unemployment fraud and how to prevent falling victim to it:
...News reports of people filing for benefits and then waiting weeks or months for aid — and often unable to reach a person at the unemployment agency — have amplified pressure on states to approve claims quickly. Most state systems couldn't handle the skyrocketing numbers of unemployment claims that came in the first few months of the pandemic, opening the door for more widespread fraud.
"When we hit 16% and then 24% unemployment last April, the systems crashed," said Brian Sanvidge, who leads regulatory compliance and investigations for New York-based accounting firm Anchin and previously oversaw unemployment fraud investigations for the state of New York during his time as inspector general at the New York State Department of Labor. "They couldn't handle it."
Identity theft, Sanvidge said, is a big part of the problem. In fact, he received a debit card for unemployment benefits from the state of Illinois.
"I have to call the state and say, 'Not me. I'm a principal at Anchin. I didn't apply'" for unemployment assistance, he said.
Employers play a key role in stopping fraud, Sanvidge said.
"The system is designed so that the employer verification is the stopgap to fraud," he said.
When a worker who has been laid off files for unemployment benefits, Sanvidge said, the former employer is notified. If that worker hasn't been laid off or was never an employee — likely scenarios when fraudsters use stolen identities to file a claim — the employer is supposed to notify the unemployment agency.
It's important, Sanvidge said, for companies to file reports on new hires in a timely manner.
And, he said, it's critical that companies respond quickly to state notifications about unemployment claims for alleged former employees.
Sanvidge noted that with mail delivery being slower than in the past, employers should also be mindful of time constraints if they're sending or receiving information via the U.S. Postal Service instead of electronically.
Read the full article from the Journal of Accountancy.