Audit says state did not have adequate controls to prevent unemployment scam

SPOKANE, Wash. — A report from the state auditor says the state Employment Security Department did not have adequate controls to prevent the recent unemployment scam.

A slew of illegal unemployment insurance claims paid out last spring totaled about $600 million and grew into the largest fraud in Washington’s history.

The audit provided the first accounting of the circumstances surrounding schemes that targeted Washington state’s unemployment benefits as the coronavirus pandemic was growing.

Key findings include that the “known and suspected” loss resulting from fraud was about $600 million.

The state recovered $250 million, resulting in an estimated net loss of $350,9 million.