Texas paid $411 million in fraudulent unemployment claims in pandemic, under 1% of claims

$46 billion. That’s how much the U.S. Labor Department estimates was stolen in fraudulent unemployment claims across the country during the pandemic.

So how does Texas rank in this total?

RELATED: Texas ranked among one of the top US states with rising unemployment claims: report

For the period March 2020 to August 2021, the Texas Workforce Commission says it paid $411 million in benefits on about 63,000 unemployment claims that were later determined to be imposter fraud. That represents less than 1% of the $55 billion total claims paid.  

TWC says out of nearly five million unemployment claims filed, its fraud detection systems blocked 900,000 fraudulent claims, or about 18%, preventing a loss of $4 billion.  

TWC says its investigators are still working 6,714 cases for applicants who have been victims of identity theft.  

Stories of stolen unemployment benefits stacked up throughout the pandemic.  

"Someone has gone in there and changed my birthdate using my social and I guess they're collecting money on it. It's insane. Unsettling, for sure," Kevin Osborn told us when he was awaiting benefits back in April 2021.


"All this money they're claiming under me, I could really use. The real Nathern Brown really could use in this current situation, in this current pandemic. It's like fraudulently being taken away from me," Nathern Brown told us in March 2021 after he discovered his benefits had been stolen by someone else.  

Thousands of Texans who lost their jobs had to wait months and months for unemployment benefits as the Texas Workforce Commission had to sort the real from the fake.  

Nathern Brown says he finally received all of his payments in June 2022 in one lump sum.  

"It took two years to let it happen, because remember my identity got stolen at first. Seemed like that took a year. And it took another year to prove everything I sent was the right stuff," said Brown.


Nationwide, the US Labor Department says 200,000 cases involved thieves using Social Security numbers for dead people and prisoners. The rest, investigators say, came from identity thieves mining from years of data breaches dumped on the dark web, leaving people like Brown in the lurch.

"It was a struggle, and me being pretty creative on how to pay my bills," said Brown.

Regarding its systems to prevent fraud, TWC sent us this statement:

"TWC has historically maintained robust measures for identifying UI claim fraud. The agency participates in all USDOL-required data cross-matches to identify individuals drawing benefits and not reporting earnings from work and potential ID theft. The cross-matched factors include incarceration, Social Security Administration, and interstate benefits, to name a few. 

TWC is an active participant in the National Association of State Workforce Agencies (NASWA) UI Integrity Center. The Center offers numerous fraud detection and identity verification services, including:  

- Integrity Data Hub (IDH) tools

- Suspicious Actor Repository (SAR)

- Suspicious E-Mail Domains

- Multi-State Crossmatch (MSCM)

- Foreign Internet Protocol (IP) Address Detection implemented

- Fraud Alert application 

- Bank Account Verification

TWC leveraged these existing sources to create highly predictive claims characteristics which point to imposter claim fraud. Expanding on the work from the pandemic, we have developed very sophisticated machine learning models which we continue to use and refine in order to stop imposter claim attempts we still see post-pandemic.

Employers provide a vital bulwark against fraud – particularly imposter fraud where the employer can verify that the employee is still employed. TWC urges employers to respond to Initial Claim Notices to help prevent theft. Similarly, TWC encourages claimants to quickly respond to any inquiries from TWC."

If you suspect someone has applied for unemployment benefits in your name, you can report it by emailing TWC.fraud@twc.texas.gov or calling the fraud hotline at (800) 252-3642