Five-second answer

Claim we investigated

Washington lost more than $600 million to unemployment fraud in 2020, and much of it was never recovered.

Mostly true. Washington paid $647 million to fraudsters in 2020; about two-thirds was recovered, leaving about $214 million unrecovered by late 2024. Three State Auditor reports put 2020 fraudulent payments at $646.8 million, and Attorney General recovery records show $432.6 million returned by December 2024, so the loss is real but most of the money came back.

Quote or cite this fact-check

FactHub rates the claim “Washington lost more than $600 million to unemployment fraud in 2020, and much of it was never recovered” Mostly true (high confidence): Washington paid $647 million to fraudsters in 2020; about two-thirds was recovered, leaving about $214 million unrecovered by late 2024. Reviewed October 18, 2026. https://facthub.org/n/article/wa-unemployment-fraud-2020/1

One-minute summary

What the evidence establishes

  • The State Auditor found $646.8 million in fraudulent unemployment payments in 2020, about 4.8 percent of the $13.6 billion ESD paid that year.
  • About 90 percent of it, more than $570 million on more than 100,000 claims, went out in the weeks of May 9 and 16, 2020.
  • The auditor flagged another $460.5 million in questionable claims, for a possible total of $1.1 billion; ESD called that a gross mischaracterization, and no final resolution has been published.
  • Recoveries reached $370 million by March 2021 and more than $432.6 million by December 2024, leaving about $214.4 million, a third, unrecovered.
  • Auditors found ESD had no robust anti-fraud unit, ran its identity-theft screen after paying claims, had stopped its jail cross-match, and did not require second reviews of large claims.
  • Federal rules let pandemic claimants self-certify, and every state was hit; GAO estimates fraud took 11 to 15 percent of pandemic unemployment benefits nationally.
Important context: The $647 million is what the Employment Security Department paid on claims it later identified as fraudulent in calendar 2020, out of more than $13.6 billion in benefits that year. It is a gross figure: recoveries since then have cut the net loss to about $214 million as of December 2024. The State Auditor says the true total is likely higher, and flagged another $460.5 million in questionable claims that were never publicly resolved. Most of the stolen money was federal pandemic aid.

The evidence

The conclusion rests on the combined record. Expand each item to see its role and limitations.

Independence note: This check uses 6 methods across 5 institutions and 2 countries or international groupings.
Evidence map
Method Institution / country Year(s) What it shows Key limitation Primary links
Independent government audit and fraud investigation of the agency's claim records Washington State Auditor's Office United States 2020, 2021 The State Auditor's April 13, 2021 fraud investigation found $646,818,372 misappropriated in 2020: $642,954,417 through imposter claims filed with stolen identities and $3,863,955 by people claiming benefits they were not eligible for. ESD paid more than $13.6 billion in benefits that year, so identified fraud was about 4.8 percent. The performance audit adds that more than $570 million, about 90 percent, was paid in the weeks of May 9 and 16, 2020, on more than 100,000 claims, and that the true total is likely greater because older claims were never rerun through improved fraud screens. The auditor also counted $460,503,024 in questionable payments flagged for review but not yet investigated, for a possible total of $1.1 billion. The figure is fraud ESD identified, compiled from ESD's own data, which the auditor said was incomplete and changed between versions; it excludes undetected fraud and does not include fraud after 2020. It is a gross amount before recoveries. The accountability audit and the performance audit both rely on the fraud investigation's numbers, so they are not independent confirmations of each other. Washington State Auditor's Office Washington State Auditor's Office Washington State Auditor's Office
Review of state recovery records, forfeiture actions and settlements Washington State Attorney General's Office, Washington State Auditor's Office United States 2020, 2021, 2023, 2024, 2026 By June 30, 2020, the state had recovered $250 million of about $600 million in known or suspected fraud. By March 2021, ESD had recovered $370 million, about 57 percent of the $647 million, mainly from banks returning payments. Attorney General forfeiture actions added $41.5 million from 2021 to 2023, and settlements with Metropolitan Commercial Bank ($10 million, December 2024) and Block, owner of Cash App ($20 million, July 2026), followed. As of December 2024 the Attorney General put total recoveries at more than $432.6 million, leaving about $214.4 million, a third of the identified fraud, unrecovered after more than four years. Recovery totals after 2021 come from Attorney General press releases that report ESD's figures; FactHub found no audited recovery total after 2021. The December 2024 release frames the $214.4 million against total pandemic benefits of $21.7 billion, a larger base than 2020 alone. The July 2026 Block settlement does not state how much goes to ESD, so no updated net figure is available. Washington State Auditor's Office Washington State Office of the Attorney General Washington State Office of the Attorney General
Audit testing of the agency's internal controls, fraud tools and identity checks Washington State Auditor's Office United States 2020, 2021 The State Auditor's December 2020 financial-statement audit found ESD did not have adequate internal controls to prevent the fraud and had reported inaccurate fraud and recovery numbers. Its automated identity-theft screen ran the day after claims were filed, so once the waiting week was waived in March many claims were paid before screening; ESD did not see the risk until mid-May. ESD had no robust anti-fraud unit, focused on claimants misreporting their own eligibility, lacked a process for spotting fraud trends, and joined the multistate Integrity Data Hub only in fall 2020. It had stopped cross-matching claims against jail and prison records in late 2018. The fraud investigation found questionable identity documents accepted, a backlog of about 56,000 possible imposter claims at the end of 2020, and no second review of staff decisions on large claims; one claims specialist later misappropriated at least $315,282. These are the auditor's judgments; ESD disputed several, saying the auditor misdescribed its Discovery screening and that claims flagged as imposter fraud were not paid while under review. The auditor did not estimate how many dollars each weakness cost, and found two other lapses (delinking Social Security numbers and disabling multi-factor login) were not significant factors. Washington State Auditor's Office Washington State Auditor's Office Washington State Auditor's Office Washington State Auditor's Office
Audit review of federal program rules and state policy decisions Washington State Auditor's Office United States 2020, 2021 The CARES Act's Pandemic Unemployment Assistance program let applicants self-certify their employment by checking a box and required claims to be backdated, which the auditor said likely made fraudulent payments higher; the U.S. Labor Department told states not to require documentation. The fraud investigation called these reduced verification requirements possibly the largest contributing factor. Eliminating the one-week waiting period, which ESD normally used to verify claims, likely did not change how many fraudsters were paid but did increase how much they got. The auditor also found most of the loss likely came from federal CARES Act money, and ESD did not expect to have to repay it. The auditor judged the waiting week's effect qualitatively and did not quantify it. Washington's waiver came from the governor on March 18, 2020, nine days before the CARES Act offered federal money for it, so it was a state choice as well as a federal incentive. Washington State Auditor's Office Washington State Auditor's Office Washington State Auditor's Office Washington State Auditor's Office
Statistical estimate of national fraud from sampling and imputation, and inspector general analysis of improper payment rates U.S. Government Accountability Office, U.S. Department of Labor Office of Inspector General United States 2020, 2021, 2022, 2023 GAO estimated that fraud in unemployment programs during the pandemic was likely between $100 billion and $135 billion, about 11 to 15 percent of benefits paid. The Labor Department's inspector general estimated at least $191 billion of about $888 billion, 21.52 percent, could have been improper payments, with more than $76 billion likely paid to fraudsters. Washington's identified fraud was about 4.8 percent of 2020 benefits and, by ESD's count, about 3 percent of the $21.7 billion it paid over the whole pandemic. Washington's Attorney General says California lost $18.7 billion, Arizona $4.4 billion and Virginia $1.6 billion. GAO's and the inspector general's figures cover all states and the whole pandemic period and include estimated undetected fraud, while Washington's figure counts only fraud it identified in 2020, so the rates are not directly comparable. No federal source found ranks states by fraud losses on a consistent basis, and the Attorney General's comparisons with California, Arizona and Virginia cite no source. U.S. Government Accountability Office U.S. Department of Labor Office of Inspector General Washington State Office of the Attorney General
Federal criminal prosecution records and audit narrative U.S. Attorney's Office, Western District of Washington, Washington State Auditor's Office United States, Nigeria 2020, 2021, 2022 By mid-May 2020, news reports linked the attack to a Nigerian fraud ring known as Scattered Canary using personal data stolen in earlier breaches, and a May 14 Secret Service alert named a Nigerian ring; the auditor said other sophisticated groups likely took part too. In the best-known prosecution, Abidemi Rufai, an aide to the governor of Nigeria's Ogun State, was sentenced in Tacoma in September 2022 to five years in prison; ESD paid $350,763 on fraudulent claims to accounts he controlled. The name Scattered Canary came from news reports citing a private security firm, not from a government finding, and the auditor said other groups also took part. The one prosecution found here recovered a tiny fraction of the loss, and federal investigators have not published an attribution of the full $647 million. Washington State Auditor's Office U.S. Attorney's Office, Western District of Washington
1. Three State Auditor reports put identified 2020 fraud at $646.8 million

The State Auditor's April 13, 2021 fraud investigation found $646,818,372 misappropriated in 2020: $642,954,417 through imposter claims filed with stolen identities and $3,863,955 by people claiming benefits they were not eligible for. ESD paid more than $13.6 billion in benefits that year, so identified fraud was about 4.8 percent. The performance audit adds that more than $570 million, about 90 percent, was paid in the weeks of May 9 and 16, 2020, on more than 100,000 claims, and that the true total is likely greater because older claims were never rerun through improved fraud screens. The auditor also counted $460,503,024 in questionable payments flagged for review but not yet investigated, for a possible total of $1.1 billion.

Limit: The figure is fraud ESD identified, compiled from ESD's own data, which the auditor said was incomplete and changed between versions; it excludes undetected fraud and does not include fraud after 2020. It is a gross amount before recoveries. The accountability audit and the performance audit both rely on the fraud investigation's numbers, so they are not independent confirmations of each other.

Verify: Accountability Audit Report: Employment Security Department, July 1, 2017 through June 30, 2020 (Report 1028000) Washington's Unemployment Benefit Programs in 2020: Understanding improper payments and service delays during the COVID-19 pandemic (Performance Audit Report 1028078) Fraud Investigation Report: Employment Security Department, January 1, 2020 through December 31, 2020 (Report 1028164)

2. About two-thirds has been recovered, leaving roughly $214 million lost

By June 30, 2020, the state had recovered $250 million of about $600 million in known or suspected fraud. By March 2021, ESD had recovered $370 million, about 57 percent of the $647 million, mainly from banks returning payments. Attorney General forfeiture actions added $41.5 million from 2021 to 2023, and settlements with Metropolitan Commercial Bank ($10 million, December 2024) and Block, owner of Cash App ($20 million, July 2026), followed. As of December 2024 the Attorney General put total recoveries at more than $432.6 million, leaving about $214.4 million, a third of the identified fraud, unrecovered after more than four years.

Limit: Recovery totals after 2021 come from Attorney General press releases that report ESD's figures; FactHub found no audited recovery total after 2021. The December 2024 release frames the $214.4 million against total pandemic benefits of $21.7 billion, a larger base than 2020 alone. The July 2026 Block settlement does not state how much goes to ESD, so no updated net figure is available.

Verify: Washington's Unemployment Benefit Programs in 2020: Understanding improper payments and service delays during the COVID-19 pandemic (Performance Audit Report 1028078) AG Ferguson nets $10M more through his innovative unemployment fraud recovery initiative Block Inc., owner of Cash App, settles two disputes with WA

3. Auditors found weak and broken fraud controls at ESD

The State Auditor's December 2020 financial-statement audit found ESD did not have adequate internal controls to prevent the fraud and had reported inaccurate fraud and recovery numbers. Its automated identity-theft screen ran the day after claims were filed, so once the waiting week was waived in March many claims were paid before screening; ESD did not see the risk until mid-May. ESD had no robust anti-fraud unit, focused on claimants misreporting their own eligibility, lacked a process for spotting fraud trends, and joined the multistate Integrity Data Hub only in fall 2020. It had stopped cross-matching claims against jail and prison records in late 2018. The fraud investigation found questionable identity documents accepted, a backlog of about 56,000 possible imposter claims at the end of 2020, and no second review of staff decisions on large claims; one claims specialist later misappropriated at least $315,282.

Limit: These are the auditor's judgments; ESD disputed several, saying the auditor misdescribed its Discovery screening and that claims flagged as imposter fraud were not paid while under review. The auditor did not estimate how many dollars each weakness cost, and found two other lapses (delinking Social Security numbers and disabling multi-factor login) were not significant factors.

Verify: Auditor McCarthy releases first audit on unemployment fraud Washington's Unemployment Benefit Programs in 2020 (performance audit summary page) Fraud Investigation Report: Employment Security Department, January 1, 2020 through December 31, 2020 (Report 1028164) Gaps in accountability led to $315,000 misappropriation by Employment Security Department employee

4. Federal pandemic rules and the waived waiting week opened the door

The CARES Act's Pandemic Unemployment Assistance program let applicants self-certify their employment by checking a box and required claims to be backdated, which the auditor said likely made fraudulent payments higher; the U.S. Labor Department told states not to require documentation. The fraud investigation called these reduced verification requirements possibly the largest contributing factor. Eliminating the one-week waiting period, which ESD normally used to verify claims, likely did not change how many fraudsters were paid but did increase how much they got. The auditor also found most of the loss likely came from federal CARES Act money, and ESD did not expect to have to repay it.

Limit: The auditor judged the waiting week's effect qualitatively and did not quantify it. Washington's waiver came from the governor on March 18, 2020, nine days before the CARES Act offered federal money for it, so it was a state choice as well as a federal incentive.

Verify: Fraud Investigation Report: Employment Security Department, January 1, 2020 through December 31, 2020 (Report 1028164) Washington's Unemployment Benefit Programs in 2020 (performance audit summary page) Auditor McCarthy releases first audit on unemployment fraud Washington's Unemployment Benefit Programs in 2020: Understanding improper payments and service delays during the COVID-19 pandemic (Performance Audit Report 1028078)

5. Every state was hit; national estimates put fraud at 11 to 15 percent

GAO estimated that fraud in unemployment programs during the pandemic was likely between $100 billion and $135 billion, about 11 to 15 percent of benefits paid. The Labor Department's inspector general estimated at least $191 billion of about $888 billion, 21.52 percent, could have been improper payments, with more than $76 billion likely paid to fraudsters. Washington's identified fraud was about 4.8 percent of 2020 benefits and, by ESD's count, about 3 percent of the $21.7 billion it paid over the whole pandemic. Washington's Attorney General says California lost $18.7 billion, Arizona $4.4 billion and Virginia $1.6 billion.

Limit: GAO's and the inspector general's figures cover all states and the whole pandemic period and include estimated undetected fraud, while Washington's figure counts only fraud it identified in 2020, so the rates are not directly comparable. No federal source found ranks states by fraud losses on a consistent basis, and the Attorney General's comparisons with California, Arizona and Virginia cite no source.

Verify: Unemployment Insurance: Estimated Amount of Fraud During Pandemic Likely Between $100 Billion and $135 Billion (GAO-23-106696) Pandemic Response Oversight Plan (2023 revision) AG Ferguson nets $10M more through his innovative unemployment fraud recovery initiative

6. Organized identity thieves, including a Nigerian ring, carried out the attack

By mid-May 2020, news reports linked the attack to a Nigerian fraud ring known as Scattered Canary using personal data stolen in earlier breaches, and a May 14 Secret Service alert named a Nigerian ring; the auditor said other sophisticated groups likely took part too. In the best-known prosecution, Abidemi Rufai, an aide to the governor of Nigeria's Ogun State, was sentenced in Tacoma in September 2022 to five years in prison; ESD paid $350,763 on fraudulent claims to accounts he controlled.

Limit: The name Scattered Canary came from news reports citing a private security firm, not from a government finding, and the auditor said other groups also took part. The one prosecution found here recovered a tiny fraction of the loss, and federal investigators have not published an attribution of the full $647 million.

Verify: Washington's Unemployment Benefit Programs in 2020: Understanding improper payments and service delays during the COVID-19 pandemic (Performance Audit Report 1028078) Nigerian state official sentenced to 5 years in prison for stealing U.S. disaster aid and taxpayer refunds

Common questions

“The State Auditor said Washington lost $1.1 billion, so $647 million understates it.”

The auditor said losses may be as high as $1.1 billion, adding $460.5 million in questionable claims that had been flagged but not investigated. Those were not confirmed fraud: ESD said a rerun a month later cut the questionable imposter amount from $458 million to about $222 million, and no final resolution has been published. The $647 million is the confirmed floor, and the auditor says the true figure is likely somewhat higher.

“Every state was hit, and Washington did better than most.”

Every state was attacked, and Washington's identified fraud, about 3 to 5 percent of benefits, is well below GAO's 11 to 15 percent national estimate. ESD notes the federal benchmark assumed a 10 percent improper payment rate. But the numbers measure different things: GAO estimated all fraud including undetected fraud, while Washington's figure counts only fraud it caught. No reliable state ranking on a common basis was found.

“Federal rules forced ESD to pay without checks, so the agency is not to blame.”

Federal self-certification and backdating rules were the largest factor, the auditor found, and the volume of claims was unprecedented. But several failures were ESD's own: its jail cross-match had been off since 2018, its identity-theft screen ran after payment, and it lacked a proactive fraud unit. The auditor concluded that available fraud-prevention techniques could have lessened the impact.

“Most of the money was federal, so Washington did not really lose it.”

The auditor found most of the loss likely came from federal CARES Act money, and ESD did not expect to repay it, so state employers' tax bills were largely spared. The money was still public money paid by U.S. taxpayers, including Washingtonians, and it was lost through a state agency's payments.

Conclusion

The first half of the claim holds. Every official account, from the State Auditor's three April 2021 reports to the Attorney General's 2024 release, puts Washington's identified 2020 unemployment fraud at about $647 million, and the auditor says the true figure is likely higher because claims were never rerun through the improved screens and people kept reporting stolen identities. About 90 percent of it went out in the weeks of May 9 and 16, 2020, when an imposter attack using identities stolen in earlier data breaches overwhelmed the Employment Security Department. The second half is accurate but incomplete. About $214 million, a third of the identified fraud, had not been recovered as of December 2024, more than four years later, and little more is likely: a $20 million Cash App settlement in July 2026 is the largest recent addition. That is a large sum to call lost. But the claim leaves out that the state got back about two-thirds of the money, largely because banks returned payments they had not yet released, which is why the rating is Mostly true rather than True. The audit record also shows the losses were not only bad luck. The department had no proactive anti-fraud unit, its identity-theft screen ran a day after payment once the waiting week was waived, it had stopped its jail cross-match in 2018, and it did not require a second review of large claim approvals. ESD's strongest defense is also real: Congress let pandemic claimants self-certify, the volume of claims rose more than tenfold, every state was attacked, and Washington's identified fraud rate of about 3 to 5 percent is well below GAO's 11 to 15 percent national estimate. That comparison is not apples to apples, because GAO estimated undetected fraud while Washington's figure counts only fraud it found. What remains unknown is how much of the $460.5 million in questionable 2020 payments proved fraudulent, how much fraud went undetected, and whether any reliable state-by-state ranking exists. Confidence is high because the core figures come from independent audits and enforcement records that agree within a few million dollars.

How we checked

  1. Defined the claim as: Washington's unemployment program paid more than $600 million on fraudulent claims in calendar 2020, and a substantial share has never been recovered.
  2. Read the State Auditor's three April 2021 reports in full (performance audit 1028078, fraud investigation 1028164 including ESD's response, and accountability audit 1028000), plus the December 2020 financial-statement findings and the December 2021 employee misappropriation report.
  3. Traced recovery totals through the performance audit and Attorney General releases from September 2023, December 2024 and July 2026, and computed the unrecovered share from the latest stated total.
  4. Compared Washington's identified fraud with GAO's statistical estimate and the Labor Department inspector general's improper-payment estimate, and recorded why they are not directly comparable.
  5. Checked the attribution to a Nigerian fraud ring against the auditor's account and a federal sentencing release.
  6. Recorded the strongest arguments from ESD and from critics, including the disputed $1.1 billion figure, and recorded limitations for every evidence item.

Editorial note: Scope: This article checks how much Washington paid on fraudulent unemployment claims in calendar 2020, how much has been recovered and what the State Auditor found about why. It does not estimate fraud in 2021 or later, overpayments to eligible claimants, or customer-service delays except where they bear on fraud. Federal and national figures cover all states and the whole pandemic period, and are used only for context. External review: No external specialist review has been recorded. Political context: Critics cite the State Auditor's possible $1.1 billion; ESD and the Attorney General cite a 3 percent fraud rate and a 1 percent net loss. FactHub tested both against the same reports and explains where each is right. To verify yourself: (1) open the State Auditor's fraud investigation report 1028164 and check the misappropriation table on page 8; (2) check the recovery figures in the performance audit (page 20) and the Attorney General's December 2024 release; (3) read ESD's response in report 1028164, pages 13 to 17; (4) compare GAO-23-106696 with the Washington figures, noting the difference between estimated and identified fraud. Challenge this fact-check: Identify the specific conclusion you dispute and provide verifiable evidence that could change it. Credible challenges deserve review and a visible response through FactHub's challenge submission process.

Expert-review status

No external specialist review has been recorded for this article.

Funding and conflicts

Funding: No external funding was received for this article.

Ownership: FactHub prepared the analysis and article. Underlying figures are attributable to the Washington State Auditor's Office, the Washington Attorney General's Office, the Employment Security Department, the U.S. Government Accountability Office, the U.S. Department of Labor Office of Inspector General and the U.S. Attorney's Office for the Western District of Washington.

Conflicts: No financial conflict has been identified. FactHub has no affiliation with the Employment Security Department, the State Auditor, the Attorney General or any campaign or party.

Sources

Sources are labeled by kind, with what this fact check takes from each, so readers can check the evidence independently.

  1. Government Washington State Auditor's Office. Washington's Unemployment Benefit Programs in 2020: Understanding improper payments and service delays during the COVID-19 pandemic (Performance Audit Report 1028078) Identifier: SAO Report No. 1028078

    The State Auditor's April 13, 2021 performance audit of ESD's 2020 fraud and customer service, with ESD's and OFM's response.

    Reliability: Washington's independently elected State Auditor audited ESD under Initiative 900 performance-audit authority. Its fraud figures come from ESD data the auditor reviewed; ESD said it generally agreed with the conclusions.

    • As of December 2020 ESD had identified $647 million in fraudulent payments, and the auditor judged the total likely greater.

      What the source says
      As of December 2020, ESD had identified $647 million in fraudulent payments made during the pandemic, but the total is likely greater.
      Executive Summary, pp. 4-5; Audit Results, p. 12

    • Qualifies: By March 2021 ESD had recovered $370 million, about 57 percent of the known 2020 fraud.

      What the source says
      ESD has recovered about 57 percent of the $647 million in known fraudulent payments it made in 2020. As of March 2021, the agency had recovered $370 million in known fraudulent payments
      Audit Results, p. 20

    • News reports in mid-May 2020 attributed the imposter fraud to a Nigerian ring called Scattered Canary using data stolen in earlier breaches.

      What the source says
      a Nigerian fraud ring known as Scattered Canary, using personal information likely stolen through data breaches that occurred before the pandemic.
      Background, p. 10

    • Qualifies: The Secret Service alert named a Nigerian ring, but the auditor said other organized groups likely took part.

      What the source says
      The alert specifically mentioned a Nigerian fraud ring; however, it is likely that other sophisticated and well-organized bad actors also participated in the attack.
      Audit Results, p. 15

    • Qualifies: Most of the loss likely came from federal CARES Act money.

      What the source says
      Most of the fraud loss that occurred during the pandemic likely came from federal CARES Act money.
      Audit Results, p. 21
  2. Government Washington State Auditor's Office. Washington's Unemployment Benefit Programs in 2020 (performance audit summary page)

    The State Auditor's web summary of performance audit 1028078.

    Reliability: Official summary of the same performance audit, written by the State Auditor's Office.

    • Qualifies: Waiving the waiting week likely did not change how many fraudsters were paid but likely increased how much they were paid.

      What the source says
      The audit found that waiving the waiting week in Washington likely was not a key factor affecting the number of fraudulent claimants that received benefit payments. It did, however, likely affect the dollar value of fraudulent payments made by ESD.
      Audit results summary

    • ESD was unprepared for mass imposter fraud and had no consistent way to spot fraud trends.

      What the source says
      Although ESD had some tools to detect imposter fraud, it was unprepared for the massive imposter fraud that occurred in 2020. In addition, it lacked a consistent process for monitoring trends that could have alerted it to widespread imposter fraud.
      Audit results summary
  3. Government Washington State Auditor's Office. Fraud Investigation Report: Employment Security Department, January 1, 2020 through December 31, 2020 (Report 1028164) Identifier: SAO Report No. 1028164

    The State Auditor's April 13, 2021 investigation quantifying 2020 misappropriation and questionable payments, with ESD's full response and the auditor's remarks.

    Reliability: The auditor said ESD's data was incomplete and changed between versions, limiting the investigation. ESD's response, printed in the report, disputes the $1.1 billion total; the auditor reaffirmed its findings.

    • Qualifies: The auditor named reduced verification for Pandemic Unemployment Assistance as possibly the largest factor in the fraud.

      What the source says
      The reduced verification requirements for Pandemic Unemployment Assistance (PUA) benefits may have been the largest contributing factor in allowing each type of misappropriation to occur.
      Investigation results, p. 6

    • Auditors found questionable identity documents and a backlog of about 56,000 possible imposter claims at the end of 2020.

      What the source says
      While many claimants provided reasonable and appropriate proof of their identity, we also found instances of some questionable documents. With the massive influx of flagged claims, at the end of 2020, Special Investigation's has accumulated a backlog of roughly 56,000 claims
      Control Weaknesses, p. 10

    • ESD did not require a second review of staff decisions on claim legitimacy, even for large claims.

      What the source says
      However, the Department does not require a secondary review of the decisions staff make about the claim's legitimacy, even for large claims.
      Control Weaknesses, p. 10

    • Continuing reports of stolen identities indicated the actual loss is greater than ESD had captured.

      What the source says
      This indicates the actual extent of misappropriation is greater than the Department has been able to capture so far.
      Limitation on investigation scope, p. 4

    • Qualifies: ESD said rerunning the same data a month later cut the questionable imposter amount from $458 million to about $222 million.

      What the source says
      The exact same data set run on April 8, 2021, updates that figure to approximately $222 million.
      ESD response, p. 15 · Employment Security Department, in its response printed in the report
  4. Party to the dispute Washington State Auditor's Office (ESD response). Fraud Investigation Report 1028164: Employment Security Department response, executive summary Identifier: SAO Report No. 1028164

    The same fraud investigation report served from the State Auditor's report portal; cited here for ESD's own response.

    Reliability: Has a stake in this finding. This passage is ESD defending its own record in its formal response to the audit.

    • Qualifies: ESD said even the auditor's misappropriation figure was under 5 percent of 2020 benefits, below a 10 percent federal baseline.

      What the source says
      even using the SAO's figures for misappropriation, resulted in less than 5 percent of total benefits paid to imposters during 2020.
      ESD response, executive summary · Employment Security Department
  5. Government Washington State Auditor's Office. Accountability Audit Report: Employment Security Department, July 1, 2017 through June 30, 2020 (Report 1028000) Identifier: SAO Report No. 1028000

    The State Auditor's April 2021 accountability audit of ESD, summarizing the 2020 misappropriation and the year's benefit payments.

    Reliability: Its fraud figures repeat the fraud investigation's; its 2020 benefit total is the denominator for the fraud rate used here.

    • In 2020, $646.8 million was misappropriated through imposter claims and $460.5 million paid on questionable claims.

      What the source says
      During 2020, $646.8 million dollars was misappropriated through imposter claims and $460.5 million was paid in questionable unemployment claims.
      Audit Results, p. 5

    • Qualifies: ESD paid more than $13.6 billion in unemployment benefits in 2020.

      What the source says
      In 2020, ESD processed approximately $1.2 billion in unemployment taxes and paid out more than $13.6 billion in unemployment benefits.
      Information about the Department, p. 7
  6. Government Washington State Auditor's Office. Auditor McCarthy releases first audit on unemployment fraud

    December 18, 2020 State Auditor announcement of findings from the fiscal 2020 statewide financial-statement audit.

    Reliability: Summarizes audit findings issued as part of the state's annual financial report; figures are as of June 30, 2020.

    • ESD lacked adequate internal controls to prevent the fraud and reported inaccurate fraud and recovery numbers.

      What the source says
      found that the Employment Security Department (ESD) did not have adequate internal controls to prevent the fraud. The Department also reported inaccurate fraud and recovery numbers for the state's financial statements.
      Second paragraph

    • ESD's automated identity-theft screen was not working for much of the year and was repaired only in May.

      What the source says
      An automated process to detect claims that present a higher risk for identity theft was not working for much of the year. By the time it was repaired in May, a large number of fraudulent transactions had already occurred.
      List of internal-control changes

    • Qualifies: Eliminating the waiting week, driven by federal incentives and the governor's order, meant benefits were paid before eligibility was verified.

      What the source says
      This decision was driven by federal incentives to distribute pandemic relief quickly as well as an executive order from the governor. As a result, benefits were paid before eligibility was verified.
      List of internal-control changes
  7. Government Washington State Auditor's Office. Vulnerabilities in federal law, gaps in state fraud detection led to losses in unemployment insurance program

    April 13, 2021 State Auditor announcement of the three ESD audit reports.

    Reliability: Press summary by the auditor; quotes State Auditor Pat McCarthy.

    • Qualifies: The State Auditor said better fraud-prevention techniques could have lessened the losses, but the agency was also overwhelmed by circumstances beyond its control.

      What the source says
      There are fraud prevention techniques Washington's program could have used to lessen the impact of these schemes, but the agency's resources also were overcome by circumstances truly beyond its control.
      Quote from State Auditor Pat McCarthy · Pat McCarthy, Washington State Auditor
  8. Government Washington State Auditor's Office. Gaps in accountability led to $315,000 misappropriation by Employment Security Department employee

    December 6, 2021 State Auditor announcement of a fraud report on an ESD claims specialist.

    Reliability: Reports the result of the auditor's separate investigation of employee misappropriation that the April 2021 report said was ongoing.

    • An ESD employee misappropriated at least $315,282 in 2020, with $121,503 more in questionable payments.

      What the source says
      A former state Employment Security Department (ESD) employee misappropriated at least $315,282 in 2020, according to a fraud report released today by the Office of the Washington State Auditor.
      First paragraph
  9. Government Washington State Office of the Attorney General. AG Ferguson nets $10M more through his innovative unemployment fraud recovery initiative

    December 24, 2024 Attorney General release announcing the Metropolitan Commercial Bank settlement and the state's total recoveries.

    Reliability: Has a stake in this finding. The Attorney General's office promotes its own recovery work and presents the state's record favorably; its recovery totals restate ESD figures and its other-state comparisons cite no source.

    • Qualifies: Washington agencies had recovered more than $432.6 million by December 2024.

      What the source says
      Overall, Washington state agencies recovered a total of more than $432.6 million in stolen funds so far.
      Paragraph beginning Overall

    • About $214.4 million remained lost to fraud as of December 2024.

      What the source says
      This leaves approximately $214.4 million lost to fraud so far, which amounts to 1% of the total benefits paid to workers.
      Paragraph beginning This leaves

    • Qualifies: ESD puts pandemic fraud at $647 million, 3 percent of the $21.7 billion it paid over the pandemic.

      What the source says
      The Employment Security Department estimates that during the pandemic, fraudulent claims accounted for $647 million, or 3%, of the overall $21.7 billion it paid in unemployment benefits paid to workers.
      Paragraph beginning Overall

    • Qualifies: The Attorney General says California, Arizona and Virginia lost far more, without citing a source.

      What the source says
      Other states experienced much larger losses to fraud, like California at $18.7 billion. Arizona lost $4.4 billion and Virginia lost $1.6 billion to fraud, and both have similar-sized populations to Washington state.
      Paragraph beginning Other states
  10. Government Washington State Office of the Attorney General. Block Inc., owner of Cash App, settles two disputes with WA

    July 8, 2026 Attorney General release announcing a $20 million settlement over stolen unemployment benefits moved through Cash App.

    Reliability: Has a stake in this finding. The Attorney General's office announcing its own settlement; it does not give an updated total of recoveries.

    • Qualifies: Block agreed in July 2026 to a $20 million settlement over fraudulent unemployment deposits into Cash App accounts.

      What the source says
      reached a $20 million settlement resolving its investigation into how Block handled fraudulently transferred unemployment deposits into Cash App accounts
      Second paragraph
  11. Government U.S. Government Accountability Office. Unemployment Insurance: Estimated Amount of Fraud During Pandemic Likely Between $100 Billion and $135 Billion (GAO-23-106696) Identifier: GAO-23-106696

    September 2023 GAO estimate of fraud in all states' unemployment programs during the pandemic.

    Reliability: Congress's nonpartisan auditor used statistical sampling and imputation; the Labor Department disputed parts of the method. The estimate is national and not broken out by state.

    • Qualifies: GAO estimated pandemic unemployment fraud at $100 billion to $135 billion nationally.

      What the source says
      GAO estimates that the amount of fraud in unemployment insurance (UI) programs during the COVID-19 pandemic was likely between $100 billion and $135 billion.
      What GAO Found

    • Qualifies: GAO put national fraud at 11 to 15 percent of pandemic unemployment benefits.

      What the source says
      We estimate that fraud accounted for 11-15% of the total amount of unemployment insurance benefits paid during the pandemic.
      Fast Facts
  12. Government U.S. Department of Labor Office of Inspector General. Pandemic Response Oversight Plan (2023 revision)

    The Labor Department inspector general's 2023 oversight plan summarizing its estimates of improper and fraudulent pandemic unemployment payments.

    Reliability: The inspector general applied the Labor Department's estimated improper payment rate to total pandemic benefits; it says the true rate was likely higher because the PUA program was excluded.

    • Qualifies: The inspector general estimated at least $191 billion of about $888 billion in pandemic unemployment benefits could have been improper.

      What the source says
      Applying the estimated 21.52 percent improper payment rate to the approximate $888 billion in pandemic UI expenditures, at least $191 billion in pandemic UI payments could have been improper payments, with a significant portion attributable to fraud.
      Results summary, pandemic UI improper payments
  13. Government U.S. Attorney's Office, Western District of Washington. Nigerian state official sentenced to 5 years in prison for stealing U.S. disaster aid and taxpayer refunds

    September 26, 2022 Justice Department release on the sentencing of Abidemi Rufai, hosted by the Labor Department inspector general.

    Reliability: Federal prosecutors' account of a completed case; the figures are from court records and the defendant's restitution agreement.

    • ESD paid $350,763 on fraudulent pandemic claims to accounts controlled by a Nigerian state official, its largest loss in his case.

      What the source says
      The largest amount of fraud was committed against the Washington State Employment Security Department, which paid out $350,763 in fraudulent pandemic unemployment claims to accounts controlled by Rufai.
      Fifth paragraph

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