Be skeptical of DETR’s claims of unprecedented unemployment fraud

22 March 2023

As the COVID-19 pandemic halted Nevada’s economy, countless families relied on unemployment benefits to keep roofs over their heads and food on their tables. Many claimants worked with the Department of Employment, Training and Rehabilitation (DETR), to ensure their receipt of benefits was timely and proper.

Now, years later, DETR aims to claw back nearly $1.4 billion in “improper” or “fraudulent” payments. If DETR recklessly runs down this road, honest families living paycheck to paycheck will face sudden demands to repay tens of thousands of dollars in allegedly “improper” or “fraudulent” unemployment benefits.

As some have observed, DETR’s figures represent an unprecedented and unbelievable amount of improper or fraudulent claims, especially for a small state like Nevada. In fact, I’d argue, the figures seem literally unbelievable. We should ⎻ and must ⎻ be skeptical. After all, this isn’t the first time a state has claimed staggering amounts of fraud and improper unemployment payments. And it wouldn’t be the first time that such claims turned out to be largely fictional.

For three years as a student-attorney at the University of Michigan Law School’s Unemployment Insurance Clinic (since renamed the Workers’ Rights Clinic), I represented claimants who accepted benefits during the Great Recession and were told, years later, that their benefits were paid improperly. In many cases, the state accused them of fraud.

In case after case, we would find that some small discrepancy – some innocent and minor error that anyone could make – led to the state’s claim of fraud. And in case after case, we would see administrative law judges laugh Michigan’s Unemployment Insurance Agency out of the courtroom, finding that the claimants owed nothing.

Our efforts helped expose Michigan’s use of software that improperly and summarily determined that any minor discrepancy in a claimant’s file amounted to fraud. We eventually pursued reforms and, through our work in collaboration with local law firms, massive settlements in excess of $20 million were secured in favor of claimants wronged by the state.

Nevada should learn from Michigan’s mistakes. While many Michiganders eventually achieved some measure of justice, the road to that outcome was long and arduous. And the state’s accusations inflicted real costs. These costs extended well beyond the tens of thousands (in some cases, hundreds of thousands) Michigan demanded from ordinary people. Claimants facing financial ruin and fraud accusations contemplated suicide. Families were split apart by the prospect of living with insurmountable debt attributed to one spouse. Homes were lost. Lives were destroyed.

And that immense, entirely avoidable, human suffering began with the simple assertion, attributable to faulty software, that claimants in Michigan had committed unprecedented unemployment fraud. An assertion that wasn’t met with appropriate skepticism. An assertion the media did not challenge until the damage was done.

Nevada now makes the same assertion. It claims that many of its most vulnerable, working-class citizens committed untold fraud. It claims that it has just learned this, even though the benefits at issue were paid years ago. And it is now placing the burden on those citizens to prove that they have not committed fraud and that they were entitled to the benefits they received.

To be sure, some amount of fraud may have occurred and our state has a legitimate interest in ensuring that our limited taxpayer dollars aren’t misappropriated by fraudsters. But we must be skeptical when DETR announces a degree of fraud so staggering that it strains belief. We need to know how that conclusion was reached. We need to know if software was used to make that determination and how that software reached its conclusions. We need to know if actual human beings quality-checked any software-generated determinations. And, above all, we need to know what will be done to make people whole if and when it turns out that DETR’s figures are as flawed as those touted by the state of Michigan a few short years ago.

We stand at a crucial crossroads on this issue as the state begins to issue its repayment notices and demands. There is time to act and to put healthy skepticism to work, but it must be swift and it must be decisive. DETR must be transparent about the basis for its claims, and both our state leaders and the media should be asking tough questions. If we blindly accept these claims and believe the worst about our neighbors, we do so at the peril of our state’s most vulnerable families. I’ve seen first-hand the disastrous and irreversible harms that lie down that road. I hope Nevada is wise enough to avoid it.

Joe Dalia is a privacy and technology attorney and father of three living in Henderson, Nevada. You can follow him on Twitter @JosephDalia, or email him at [email protected].

The post Be skeptical of DETR’s claims of unprecedented unemployment fraud appeared first on The Nevada Independent.

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