Probe: Dozens of D.C. employees committed fraud

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Local,DC,Courtney Zott

Dozens of District government employees knowingly committed fraud by accepting unemployment checks while holding a city job, according to Department of Employment Services Director Lisa Mallory.

The finding is part of a broad investigation into the overpayment of approximately 130 former city government workers. Of those workers, 93 were found to have been knowingly scamming the system,
while the remaining quarter “weren’t long enough to be fraud,” Mallory testified at a Committee on Housing and Workforce Development budget hearing Monday.

“Many individuals will come, start working in the District government and they’re still collecting UI [unemployment insurance] because they’re not going to get paid for the first two or three weeks,” she said at an oversight hearing in February after the discovery had been announced.

Nearly 90 District employees were suspended in February after local and federal investigators found that they were cashing unemployment checks while still employed. In addition, about 40 former employees were found to have been taking advantage of the District’s unemployment insurance system.



The city estimates it has paid out about $800,000 in unemployment benefits to working city employees since 2009. At the budget hearing, Mallory said it is still “unknown how much the District will be able to recover at this time.”

The department, in coordination with both the inspector general’s and attorney general’s offices, is working to recover the funds through either civil action or by intercepting the former employees’ income tax returns, she said Monday. Those accused of the wrongdoing can also voluntarily reimburse the city.

Mallory said the department is also working to increase detection and prevention.

DOES began conducting quarterly cross-examinations with the National Directory for New Hires, a federal database, about a year ago to ensure that new hires aren’t receiving unemployment checks, she said
in the oversight hearing.

Now, they’re working to broaden that examination to include the Chief Financial Officer’s office with a system that would prevent payroll checks from going through to employees who haven’t canceled their unemployment insurance.

“This was a routine check that made us think we have to expand it,” she said.

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