Consultant estimates KS lost $700 million in unemployment fraud

WICHITA, Kan. (KWCH) - Eyewitness News is taking a closer look at what unemployment fraud could be costing the state of Kansas as many of the state’s unemployed wait for payments. A consultant who met with Kansas lawmakers estimates that the state has lost $700 million to scammers. That is $700 million of taxpayer dollars.

Lawmakers fear this issue is far from over and currently, following the exposure of a vulnerability with the Kansas Department of Labor’s website, some are exploring the idea of identity-theft protection for all Kansans.

“We asked the Department of Labor if they’ve looked into identity protection for all Kansans, and their answer back to us was, ‘it’s not our fault. We weren’t breached.’” Rep. Sean Tarwater, R-Stillwell said. “And so I guess they’re out the legislators are still working to find a solution. “We’ve got 165 reps and senators here right now that are in session that are really starving to help.”

Rep. Tarwater is among the state lawmakers working to find a solution after the consultant’s estimate into what’s been lost to unemployment fraud. The findings included roughly 75 percent of all unemployment claims in the fourth quarter of 2020 being fraudulent.

“Basically, they’ve taken most of their charge statements that they’ve gotten from all their companies across Kansas. And it looks like 70 to 75 percent of the claims are fraud,” Rep. Tarwater said.

He said most of the fraud happened in the last quarter of 2020. To date, KDOL hasn’t stated how much money the state has lost to fraud. Eyewitness News reached out to the department again on Friday (Feb. 5) and the agency said it’s working with the legislature’s post audit to find out how much money has been paid out to scammers. The department said it expects to have more information in coming weeks.

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