INDIANAPOLIS — The state agency in charge of Indiana's unemployment is tight-lipped about a federal investigation into millions of dollars stolen by scammers. But suspected victims from across the state are speaking out and sharing disturbing details about the fraud.
13 Investigates first reported on the shutdowns and warnings at the Department of Workforce Development in July.
Now there's new information about system failures, sending federal funds into the wrong hands.
A confidential letter from Indiana's Department of Workforce Development shows payments of more than $700 were deposited weekly from April through June, in one Allen County man's name.
The bulk of the money came from the Pandemic Unemployment Assistance fund created by Congress.
On paper, it appeared the DWD was doing exactly what the Cares Act was set up to do: put money into the hands of the self-employed quickly.
Just weeks ago, an unsettling discovery came to light.
"I tried to make an account with the Department of Workforce (Development's) 'Uplink,' it said my social security number was already being used," said Luke Bone, explaining how he learned he was a victim of fraud.
His identity had been used to collect nearly $10,000 in unemployment benefits.
He told 13 Investigates that he never made the claim and didn't receive the money. He told DWD the same thing.
"No I haven't. I never, I haven't even made a claim," Luke said, recalling his conversation with a case manager with the state.
That manager reportedly responded by flagging the account as fraudulent. It was a shocking development for the self-employed recruiter, who panicked over who had access to his name and social security number.
"At first, I was freaked out because I thought it was somebody I knew," Luke said.
Whoever it was, didn't have to work hard providing anything else. According to Luke, the rest of the application was filled in with bogus information.
"I told the DWD, 'This person, whoever it is, hasn't even used my correct birth date.' The DWD said, 'It's close to your birth date,'" he said with disbelief.
Apparently, the state didn't double check before approving 12-week vouchers worth thousands of dollars.
"Yeah they got paid! People are putting fake employment information, obviously fake birth dates and just getting paid," Luke said.
In July, Josh Richardson, the agency's chief of staff told 13 Investigates he suspects thousands of fraudulent claims have been paid under the PUA because there's no way to verify employer information.
"We're talking about sophisticated actors using stolen information to file dozens, hundreds of thousands of fraudulent claims," Richardson explained. "When it is a 'fraudster' entering that information, the only information we have on a PUA claim is the information that is provided by that individual."
While the DWD might not be able to confirm past self employment or gigs, applicants must provide an active phone number and an email address. In fact, the agency is now cross checking that very data trying to detect more cases of fraud.
Luke decided to check the email and phone number used with his name.
"I google searched the name and the number and it came up a deceased person in Kansas," Luke said. "It's crazy! Before distributing funds there should have been something to verify."
13 Investigates checked information connected to the alleged email address and phone number used in Luke's case. These identifiers were in someone else’s name, but we’re used on the application to get the money.
Unfortunately, the scammers used an email and phone number associated with a very common name. At least six deceased people were associated with that name in Kansas.
Luke worries about garnishments, taxes and audits, especially after the DWD sent him a letter seeking repayment for the $10,000 the agency now calls a "gross overpayment."
The DWD said in a statement, “We can categorically say that we do NOT have victims of identity theft pay overpayments. Once the ID theft is confirmed, we set up a new claim for the claimant. The overpayment will not be associated with the non-fraudulent account. There is an overpayment in our system, but we manually suppress the notice. There is also the chance of human error. If a notice did go out in error, an identity theft victim is NOT liable for the overpayment.”
Luke said the process to get help has been frustrating and that he feels like nothing more than a number.
"The DWD told me this has happened to thousands of people. The FBI and Secret Service are involved and this is a huge investigation," Luke said.
DWD Director Fred Payne confirmed fraud is an on-going issue. But no one from the agency would provide any specifics about Luke's case or the extent of the fraud.
According to Payne, "We're working with our state and our federal partners in law enforcement on addressing these issues."
On Aug. 1, the agency began an email blitz, sending out a notice about "increased fraud" to those who have received benefits during the pandemic. The notice asks claimants to change their passwords and to check their individual status in the system.
The DWD wrote, "It's a result of continued attempts by fraudsters."
Luke is also warning his friends and family. He still has a hard time believing an attempt to create an account with the DWD has led to a case of fraud.
"I'm praying, praying and turning to God. I'm holding fast to my wife and daughter and just being more patient," Luke said. "I never would have thought this would happen. It's crazy."
While Indiana officials say they don't know how much money has been taken to date, federal agencies are now investigating to try to figure it all out.