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Auditor: $590M in unemployment compensation misspent during pandemic

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State Auditor Shad White has released a report showing that over $590 million in unemployment compensation was misspent in Mississippi during the COVID-19 pandemic.

In fiscal year 2020, unemployment claims in Mississippi rose to over $2.1 billion from the previous year’s $59.6 million — a 3,500 percent increase. These increased benefits allegedly resulted in massive fraud and misspending.

“The pandemic response resulted in a historic amount of taxpayer money wasted. Some of this money is simply gone forever,” White said. “But my office is using the fraud as an opportunity to use new audit tools, like advanced data analytics that will hopefully pay dividends in the future.”

One reason the fraud occurred, according to the state auditor’s office, is because the Mississippi Department of Employment Security (MDES) bypassed or altered its fraud-prevention systems.

For example, MDES is said to have:

  • Waived the need for social security number verification on claims approvals
  • Waived the one-week waiting period for unemployment claims
  • Waived the requirement for applicants to show they were searching for work
  • Increased the Weekly Earning Allowance increase from $40 to $200
  • Altered the requirement that applicants show separation from ALL employers

The auditor’s office has partnered with an advanced data analytics firm to identify improperly paid unemployment claims, recover stolen funds if possible, and hold fraudsters accountable.

White’s team has also partnered with federal agencies to assist in investigating COVID-19 unemployment fraud, which has already led to the arrests of Aubrey Martinez last November and John Evans Jr. in December 2022.

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