Maryland Gov. Larry Hogan (right) speaks about a massive unemployment scheme that attempted to bilk the government out $501 million during a July 15 press conference in Annapolis. (William J. Ford/The Washington Informer)
Maryland Gov. Larry Hogan (right) speaks about a massive unemployment scheme that attempted to bilk the government out $501 million during a July 15 press conference in Annapolis. (William J. Ford/The Washington Informer)

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ANNAPOLIS — Maryland Gov. Larry Hogan announced Wednesday the state uncovered a $501 million identify theft scheme that involved 47,500 claims.

In the governor’s first press conference in Annapolis since June 10, he said all the claims came from out of state and that Maryland identities weren’t compromised or breached through the state Department of Labor’s unemployment insurance information system.

“This criminal enterprise seeking to take advantage of a global pandemic to steal hundreds of millions, perhaps billions of dollars, from taxpayers is despicable,” Hogan said. “We will continue to work with both the U.S. Attorney and the U.S. Department of Labor Office of Inspector General on this ongoing investigation here in Maryland and in other states across the country … to make sure the perpetrators are apprehended and prosecuted to the fullest extent of the law.”

Maryland Department of Labor Secretary Tiffany Robinson uncovered the problem based on out-of-state claims for Pandemic Unemployment Assistance.

She said the department immediately became “prepared” for the risk of fraudulent claims due to the coronavirus pandemic.

Derek Pickle, special agent for the U.S. Department of Labor’s inspector general’s office, praised Maryland officials in notifying federal authorities about the surge in fraudulent claims.

He said the office usually handles about 10 percent of its investigation workload on unemployment insurance fraud.

“Today, more than 50 percent of our investigate matters pertain to unemployment insurance and that number continues to grow by the day,” Pickle said.

Hogan said Maryland sits along 12 other states that are currently experiencing major fraudulent claims in this particular investigation.

In the meantime, the state continues to process claims at a record pace. Robinson said the state has received more claims in the past several months than the past three years combined.

Approximately 489,000 unemployment claims for $4.3 billion have been processed.

Some residents are still frustrated because not only have they experienced problems filing claims through the unemployment system, but also have either received unemployment benefits late or not at all.

State officials said some of the challenges stemmed from federal guidelines that forced the state to implement a new online application system implemented in about three weeks.

“Our department has overcome these challenges and made significant progress,” Robinson said. “We remain committed to helping Marylanders through this pandemic … [so] all eligible claimants get the benefits they deserve as quickly as possible, while also protecting the integrity of our system and your taxpayer dollars.”

As of Wednesday, the state had roughly 75,000 confirmed coronavirus cases slightly exceed 75,000, with fewer than 500 hospitalizations. The positivity rate remains about 4.2 percent.

However, Hogan stressed one troubling figure: The positivity rate for those 35 and younger is 83 percent higher that those older than 35.

Hogan said the confirmed cases have been connected with people who haven’t followed public health requirements, specifically at bars and restaurants.

He sent a letter Tuesday to county and Baltimore City leaders to enforce state regulations such as wearing face coverings and not standing in bar areas.

“Only you can keep Maryland open for business,” he said.

After the press conference, the Maryland Chamber of Commerce released a statement in support of the governor’s “quick, decisive and steadfast leadership” during the coronavirus pandemic.

“We encourage everyone to do their part to prevent the spread of COVID-19,” Christine Ross, president and CEO of the chamber, said in the statement. “Following guidance and taking preventative measures are fundamental to safeguarding jobs, reopening businesses and ensuring the continuation of our state’s economic recovery.”

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Coverage for the Washington Informer includes Prince George’s County government, school system and some state of Maryland government. Received an award in 2019 from the D.C. Chapter of the Society of...

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