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What 130 Letters Sent to One Man's Mailbox Say About Increasing Unemployment Fraud in Kansas

Doug Reed at the home where the letters from KDOL arrived. (Photo by Stephen Koranda)

STILWELL, Kansas — After Doug Reed put his elderly father’s Johnson County home up for sale, the mailbox started to fill up with letters from the Kansas Department of Labor, sometimes 25 or 30 at a time.

“We had two or three big batches of them, and they’ve been dribbling in ever since,” Reed said.

Within a couple weeks, about 130 letters had arrived, all bearing his father’s street address but addressed to different names.

“Something’s wrong and somebody needs to fix it,” Reed said. “Obviously, there’s a lot of time and money spent on getting these envelopes together, and there’s postage involved. It’s all taxpayer money.”

It’s likely related to the landslide of fraudulent unemployment claims the Kansas Department of Labor is trying to combat during the pandemic, which caused unemployment in Kansas (and across the country) to skyrocket. So far, the agency has stopped more than 100,000 fraudulent claims since the pandemic started.

Reed asked the labor department what to do several times, all while leaving the letters unopened. After a couple weeks, the department told him to box up the letters and mail them to the agency.

Agency spokesperson Jerry Grasso said Reed’s situation has been forwarded to investigators, who are looking into it for fraud.

But the fraud problem is not unique to Kansas during the pandemic. Federal officials estimated this summer that fraud nationwide could approach $26 billion. Much of it is targeting a new federal program, Pandemic Unemployment Assistance.

Acting Kansas Labor Secretary Ryan Wright said in an interview earlier this month that it’s relatively easy to spot fraudulent claims in traditional unemployment. Employers can verify that a person was never laid off.

But the new federal unemployment program is open to segments of the workforce that aren’t covered by traditional unemployment, like people who are self employed, which has created the opening for scammers. They file fraudulent claims using stolen personal information to try to collect the payments.

“This is just identity theft that is being applied to unemployment claims,” Wright said.
Photo by Stephen Koranda

Reed, who has sold his father’s home, wonders whether a scammer saw the listing online.

“If someone was going to find an address, this probably would be a good one,” Reed said.

Often, how you find out you’ve been targeted is you’ll receive a letter about an unemployment claim you did not file. 

“If you get a letter, you have been a victim of identity theft,” Wright said. “This is not you may become one. You have already been a victim of it.”

Wright encourages anyone who receives an unexpected unemployment letter to report it through an online form. That will generate a police report and provide more information on how to respond. He also suggests victims review their credit reports and bank accounts for any suspicious activity. 

To combat the fraud, KDOL has put a three-day waiting period in place for new claims to give more time for investigation. Wright says one day the agency was scheduled to pay out $37 million, but investigators discovered $35 million of it was fraudulent.

The department has struggled to handle the surge of unemployment claims caused by the pandemic, and it came to a head when the previous secretary resigned in June.

An aging computer system and the huge number of filings led to a backlog of 25,000 unemployment claims, but additional staff have now helped cut that backlog in half. Plus, with the help of $20 million in mostly federal funds, the agency added 200 temporary workers to answer phones and work through claims, which has allowed more full-time staff to focus on fighting fraud.  

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Stephen Koranda is the Statehouse reporter for Kansas Public Radio and the Kansas News Service. You can follow him on Twitter @kprkoranda. The Kansas News Service is a collaboration of Kansas Public Radio, KCUR, KMUW and High Plains Public Radio - focused on health, the social determinants of health and their connection to public policy. Kansas News Service stories and photos may be republished by news media at no cost with proper attribution and a link to ksnewsservice.org.

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