Washington State Raises Its Estimate for Number of Fraudulent Unemployment Claims by 41 Percent

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Officials with the state Employment Security Department (ESD) have sharply increased their estimate for the number of phony unemployment claims that criminals filed this spring in what became the largest fraud in Washington history.

The update, issued Wednesday, came a day before the state auditor's office announced that the first of five audits into the fraud and other pandemic-related issues at ESD will be released Friday morning.

On Wednesday, the ESD revised the number of "known, suspected or probable" fraudulent claims from this spring's fraud to 122,000, a 41% jump from the agency's estimate in August.

The ESD also revised the total stolen in the fraud to $600 million, up 4% from $576 million. The agency also reported that the amount recovered had risen to $357 million, from $340 million in August, for a net loss of $243 million.

ESD spokesperson Nick Demerice said the large upward revision in number of claims reflected more suspected claims being confirmed as fraudulent. Investigators initially flagged a large number of claims as suspicious, but then had to "do the due diligence on each and every single one of them to determine was it truly fraud," Demerice said.

Demerice wasn't sure why the percentage change in the number of fraudulent claims was so much higher than for the fraud's total dollar amount but was checking with the agency's data specialists for further details.

Separately, the ESD reported Thursday that the pandemic had pushed the state's unemployment trust fund to $1.96 billion as of Nov. 30, down from around $4.7 billion prior to the pandemic.

State officials earlier had indicated that the declining trust fund would lead to sharply higher taxes on employers. In 2021 alone, taxes were projected to jump 82.5% to an average rate of 1.88% of taxable wages.

But on Thursday, Gov. Jay Inslee announced a plan under his proposed 2021-23 budget that would lower those projected tax increases. In 2021, for example, the governor's plan would cut the proposed average tax rate by 38% to 1.17%, the ESD reported.

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