Controversy over DES Fraud Prevention Team as COVID-19 crisis continues

DES decision to double fraud prevention team staffing draws criticism

An Arizona Congressman says resources can be dedicated elewhere.

PHOENIX - As the COVID-19 pandemic continues, the demand on the unemployment system is at all-time highs.

Last week, another 52,000 Arizonans applied for unemployment insurance. The unprecedented demand has meant people have had to wait up to three weeks or more to receive payments.

"A lot of people are hurting and just want answers," said Jeremy Iverson.

Officials with the Department of Economic Security say they have ramped up their staff. Meanwhile, DES has reportedly doubled its Fraud Prevention Team, and the team has reportedly found 600 fraudulent claims since March 1.

Officials say typically 10% of claims are fraud, and also say their fraud prevention protocols in no way impacts their ability to get payments out, but Representative Ruben Gallego says the state should take those jobs and shift them over to the disbursement side, because they could use all the help they can get.

"No. That’s a dumb use of resources. You should double the staff to process the checks. You can go back and do audits later," said Rep. Gallego. He represents Arizona's 7th Congressional District which covers Downtown Phoenix, South Phoenix, and parts of the West Valley.

DES says those employees seeking fraud are different than those processing payments.

"DES has and will continue to be committed to program integrity to preserve the availability of benefits for those who are eligible for them," read a statement.

DES officials also pointed to the Pandemic Unemployment Assistance launching next month for self-employed and contract workers.

"This brand-new program expands eligibility to groups previously ineligible to receive UI. As such, DES will need to increase measures to ensure program integrity," read a statement.

Rep. Gallego said he’s worried the extra scrutiny could cost people their homes.

"This is not the time to be worried if someone is getting an unnecessary $600. We want people to spend money, to keep their families in their homes, and most importantly, to keep themselves healthy," said Rep. Gallego.

DES has also started searching for a data analytics contractor to help them find cases of fraud easier. They haven’t said if any companies have applied, or how much they’re willing to spend on a new program.

DES officials have declined a request by FOX 10 for an interview.

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