WASHINGTON — The Labor Department is clawing back more than $9 million in taxpayer funds from the state of New Jersey meant for COVID-19 pandemic unemployment benefits that were instead being paid to fraudsters, The Post has learned.
The scammers used Social Security numbers in other states that belonged to multiple addresses and even prisoners, dead people and children in some cases to bilk unemployment benefits, according to the Department of Labor Office of Inspector General, which investigated the COVID-era scheme.
More than 53,000 Unemployment Insurance claims in the Garden State were found to be fraudulent as a result.
The $9 million stolen is expected to be soon returned to federal US coffers, according to a Labor rep, and represents a fraction of the nearly $1 billion in possible unemployment fraud nationwide that Labor Inspector General Anthony D’Esposito’s office has been looking into.
D’Esposito’s office had sent a January memo warning about state UI funds being potentially defrauded.
Nearly 220,000 suspicious accounts were initially flagged as a result, and the inspector general deployed a strike team to New Jersey in April.
“New Jersey’s 53,000 fraudulent accounts illustrate Governor Sherrill’s failure to safeguard funds and a complete disregard for the American taxpayer,” D’Esposito said.
“Allowing these accounts to go unchecked is unacceptable. New Jersey’s reckless approach demonstrates a profound betrayal of hardworking Americans. My office will not rest until every account has been examined and every stolen dollar is recovered.”
Sherrill took office in January after former Gov. Phil Murphy had served two terms that spanned the pre- and post-pandemic periods in the state.
The IG’s office demanded that banks freeze most of the suspected fraudulent benefits in May.
The UI accounts spanned at least 12 states, including New York, Illinois and California, and were asked to be preserved until the end of the calendar year, per Labor officials.
“During the pandemic, criminals and bad actors exploited weaknesses to steal billions of dollars from the American people,” Acting Labor Secretary Keith Sonderling said in a prior statement.
“We are working with Vice President Vance to ensure we use every tool at our disposal to track down stolen funds, hold fraudsters accountable, and return money to the taxpayers to ensure this program is used as intended.”
D’Esposito and Sonderling have been coordinating with the White House anti-fraud task force, which has led to indictments and other attempts to recoup taxpayer funds.
The Post reached out to a rep for Sherrill’s office for comment. Reps for ex-New Jersey Gov. Phil Murphy could not be reached.
