Nearly a month after Louisiana Lagniappe restaurant owner Kevin Ortego complained to the Louisiana Workforce Commission about dozens of apparently fraudulent claims for unemployment insurance benefits he’s been asked to verify as legitimate, the influx of letters continues.
What’s more, the restaurant recently received a letter from the agency notifying a woman, whom Ortego says never worked for him, that her benefits claim had been denied but that she has the right to appeal.
“This is for someone who was never on my payroll,” Ortego says. “They’re giving a nonexistent employee the opportunity to appeal benefits she didn’t earn in the first place.”
The frustrated restaurateur says the problem is not so much annoying as it is troubling, given that the state has drained its unemployment trust fund of the more than $1 billion it had going into 2020, and he wonders how many other employers are also being scammed.
“And a year from now, when there are likely to be 25 percent fewer businesses, those of us who are still in operation are going to get hit with the 30 percent surcharge to refill the trust fund,” he says.
LWC Secretary Ava Dejoie could not speak to the specifics of the appeal letter Louisiana Lagniappe received, though she says she is looking into it.
But she acknowledges the agency is battling a lot of fraudulent claims and she urges employers like Ortego to continue bringing their concerns to her office.
“We are doing everything we possibly can to stop fraud and stamp it out at every single turn,” she says. “But we’re not catching all of it.”
Letters like the ones Ortego has received are actually evidence that the inherent checks in the system are working, she says, adding that the agency has identified more than 121,000 claims of potentially fraudulent identity theft.
So far, only a handful of cases have been prosecuted. In October, Louisiana Attorney General Jeff Landry announced five arrests related to fraudulent COVID-19 unemployment claims totaling nearly $400,000 in multiple states, including Louisiana.
Dejoie says her office regularly turns over information to state and federal prosecutors and that it is implementing additional safeguards to catch those trying to rip off the system.
“Beginning Friday, we’re going to change the messaging on our phone to say if you’re an employer and suspect fraud, hang up, go online to report it and you’ll receive a confirmation email,” she says. “We don’t want to have people hanging on the phone to do simple reporting, given the magnitude of what is happening around the country.”