Unemployment fraud tools harming Detroiters lawfully seeking benefits during coronavirus pandemic

Print More

When he can work it, Robert Gholston Jr. has a great job. Gholston trains test car drivers at General Motors’ Milford proving grounds. He’s worked at GM for 42 years. In the beginning of the coronavirus pandemic — his work — like almost everything else, shut down. 

General Motors is starting to call folks like Gholston to come in but he says, “I test cars, not viruses.” 

As the immunocompromised recipient of a liver transplant, he doesn’t think it’s safe for him to be out of quarantine, so for the moment he relies on state unemployment benefits. 

After Gholston was approved, he saw a status that said “stop payment.” His money was on hold until the state, following unemployment agency rules, could confirm his identity. 

Despite working for only one employer for almost half a century, and having an identity that can be verified on the internet in a matter of seconds, Gholston was suspected of fraud. His benefits  were stopped. 

“I have called everybody,” he said. “I’ve had a protest in since April 13th or 14th and all I have heard is that I have to wait.” 

The state, by their own admission, is overwhelmed by the staggering number of unemployment claims. As of the first week of June, 1.8 million people have filed and 38.5% of Detroiters, more than a quarter-million people in the city, are unemployed. 

The unemployment insurance system Detroiters rely on to provide supplemental dollars for food, shelter, utilities and other essentials was already limping along before the current crisis.

Less than five years ago, under the Rick Snyder administration, the agency was found to have spent more than $45 million on software that incorrectly flagged about 40,000 people for fraud

The state demanded money back, with interest and fees tacked on, and people’s lives were ruined by the expense. The state admitted their mistake but a class-action suit on behalf of the victims is still moving through the courts

Most of the issues flagged in 2016 have not, according to a 2020 audit, been fixed. Perhaps smelling blood in the water, technologically proficient, and organized scammers moved in during the coronavirus chaos, according to the state, and began filing false claims in bulk. As a response, the state froze payments and approvals for thousands of people and is now trying to verify who has a legitimate claim to benefits and who does not. 

The Michigan system, currently being sued over its fraud detection practices, is asking desperate people to trust them and to wait. 

The agency has worked aggressively to add staff and more than 2,000 workers who are now “customer facing,” according to a recent press release. Still, it remains unclear what processes are being used to flag suspicious unemployment claims and get legitimate claimants back on track. 

Getting answers from the state, or the city of Detroit is almost impossible for claimants or reporters. Calls to the communications department at the Department of Labor and Economic Opportunity were unanswered and unreturned. A call to the unemployment Ombudsman left no option to leave a message before disconnecting.

City of Detroit spokesperson John Roach said the city is directing residents to call Detroit Works for help. 

Robert Gholston said he called Detroit Works and was told he would have to wait. 

Gholston’s payments have resumed but he says the state owes him more than $3,000. He does not know why his claim was flagged as fraudulent and when he’ll get his money is a mystery. 

“My daughter works over there now,” he said of the state’s unemployment operation. “She was one of the people brought in to deal with the volume. I called her and even she can’t help me.” 

Although frustrated, Gholston does have some money to fall back on after a long career. Matthew Reid does not. 

Ried, 28, was working as a direct care worker before COVID-19. He worked 48-hour shifts caring for adults with severe disabilities in Detroit before he was laid off in March.

In late April, after waiting several weeks to be approved, he began to receive unemployment checks. However, the payments didn’t come fast enough to keep Reid from losing his housing. 

Reid and his partner, a waitress also in unemployment limbo, were living with a relative. When they were unable to pay rent they say they were told to leave. The couple was not protected by the state’s ban on evictions because they did not have a lease. 

“The biggest heartache is not working,” Reid says. “Where is our income going to come from? My parents are struggling, my sisters are struggling, so it’s very hard to get help.” 

After four weeks of receiving unemployment checks both Reid and his partner got “stop payment” notifications. They filled out the paperwork the state sent to verify their identities over a week ago but their unemployment funds remain frozen. The couple has been relying on friends to help them pay for a hotel room in Romulus but they are now out of money. 

They expect to be forced to leave June 5.

Reid has called Detroit Works and all the mutual aid numbers he’s been able to find but nobody has responded. “The thing is, my girlfriend did get a call from unemployment about a week ago,” he said. “We were waiting for that call! And then it just hung up on her.”

Sarah Alvarez is a journalist and founder of Outlier media. Text “Detroit” to 73224 to get information to help you make decisions for yourself and your family. Matthew Reid’s cash app is $reid313. 

Leave a Reply

Your email address will not be published. Required fields are marked *