Elon Musk and his Department of Government Efficiency announced this week that they had found something especially startling in their government-wide hunt for fraud: tens of thousands of people claiming unemployment benefits who were over age 115, under age 5 or with birth dates in the future.
“Your tax dollars were going to pay fraudulent unemployment claims for fake people born in the future!” Mr. Musk posted on X, his social media platform. “This is so crazy that I had to read it several times before it sank in.”
He shared a claim by the group that it had even uncovered someone with a birth date in 2154 who claimed $41,000 in unemployment.
These were, indeed, probably fake people — but in a different way than Mr. Musk seemed to realize. It was also most likely a case of his team discovering fraud that had already been discovered by someone else.
The issue dates to early in the pandemic when millions of Americans surged onto state unemployment rolls in an unprecedented expansion of the safety net. The emergency aid program enacted during President Trump’s first term was also susceptible to fraud. As many as 15 percent of unemployment claims were fraudulent, often using stolen identities.
To preserve records of that fraud and protect victims of the identity theft, the U.S. Labor Department encouraged state agencies that administer unemployment benefits to create “pseudo claim” records — in effect, to tie real cases of fraud in their data to make-believe people. The implausibility of the records was the point. Agencies were seeking a way to keep track of fraud claims while detaching them from the identities of innocent people who might one day apply for unemployment benefits themselves.
Now four years later, Mr. Musk and his team appear to have found those make-believe people. Their claims about them were also repeated by Labor Secretary Lori Chavez-deRemer during a cabinet meeting at the White House on Thursday.
The cases they cite probably do refer to real instances of people fraudulently receiving benefits, said current and former unemployment officials with the Labor Department and state work force agencies. But it is not the case, those officials said, that a hapless government was duped into doling out benefits to people it didn’t realize weren’t even born yet.
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