State auditor: More than $1.1B may be missing from Employment Security

OLYMPIA, Wash. — More than a billion dollars that should have gone to unemployed workers in our state, instead, may have ended up in the hands of crooks.

That is the stunning conclusion of an audit of the state Employment Security Department released Tuesday.

The amount believed to have been stolen was about $600 million. But the state auditor found hundreds of millions more still unaccounted for.

Some of that money may not be fraud. But for a lot of taxpayers, the damage has already been done.

“I’m frustrated,” said Kimo Wasson of Federal Way.

Wasson has good reason to be frustrated. He is one of a million out-of-work people whose account with Employment Security was co-opted by crooks.

It happened last March even while he was still working.

“I got a letter first of April saying that I qualified for benefits for unemployment, and I hadn’t filed for unemployment,” said Wasson.

Indeed, he remained employed “up until the end of July.” And when it came time for him to apply for unemployment benefits, he said, “I found out my account was locked.”

He is not alone.

The state auditor said crooks may have siphoned a whopping $1.1 billion out of the state’s unemployment insurance program.

Nearly $650 million is known to be in the hands of fraudsters. Another $461 million in payments is described as “questionable” but still under review.

A graph shows that the fraud peaked in late April of last year. It dropped off after the state, belatedly, instituted changes to thwart the thieves.

The state’s auditor, Pat McCarthy, was asked if mismanagement, bad luck or something else is to blame.

“I think it’s a combination of things,” she said, “and that’s what the audit tries to bring out into the forefront.”

Wasson knows exactly where he places the blame.

“Governor Inslee was the CEO of the state when this all happened,” he said. “And he needs to be held accountable for that.”

The state auditor said these crooks didn’t hack into the state system. They took advantage of its weaknesses, using real names and other information they found on the dark web.

Now McCarthy is making several recommendations, a form of “checks and balances,” to prevent this from happening here again.

Cox Media Group