State of Texas: Legal challenges likely for abortion law; Identity thieves target unemployment benefits

State & Regional

AUSTIN (Nexstar) — Gov. Greg Abbott, surrounded by members of the Texas Legislature, signed into law Wednesday morning one of the most restrictive abortion laws in the country.

The signing of Senate Bill 8, or the Texas heartbeat bill, ensures Texas will be at the center of the new legal challenges to Roe v. Wade. It’s supposed to take effect in September.

The law prohibits abortions after a fetal heartbeat can be detected, and while the bill doesn’t specify a timeframe, fetal heartbeats can be detected as early as six weeks into a pregnancy. It also allows anyone to sue a doctor who performs or assists in an abortion after a fetal heartbeat is detected.

“Senate Bill 8 will essentially constitute a ban on abortion, because at six weeks, which is when a fetal heartbeat can first be detected, most people don’t know that they are pregnant,” said Dr. Abigail Aiken, a medical doctor and associate professor with the LBJ School of Public Affairs at the University of Texas.

Other states have passed similar laws, but they have failed to stand up to court challenges.

“The first thing to say is that they are unconstitutional because they violate the right to choose abortion up until viability,” Aiken said.

The ruling in Roe v. Wade declared states cannot ban abortions before a fetus is viable, and defined viability at around 24 weeks of pregnancy.

But the current make up of the Supreme Court could be more favorable to restrictions on abortion.

This fall, the Court will hear a case on a Mississippi law that bans almost all abortions after 15 weeks. It’s seen as a challenge to Roe v. Wade. A decision is expected next Spring.

A court battle over the new Texas law is also likely.

“I think the first thing that people should know is that abortion will still be legal in Texas. The bill will not go into effect immediately,” Aiken said. “I would expect a lot of interesting legal procedure to be talked about.”

Families relieved as missing persons bill advances to Governor’s desk

As David Fritts made the early morning drive from Houston, once again he had his son on his mind. 

The law, once signed by the governor, will be named after  Joseph Fritts from Houston. (Courtesy: David Fritts)
The law, once signed by the governor, will be named after Joseph Fritts from Houston. (Courtesy: David Fritts)

He said he always thinks about Joseph, but this trip to the Capitol was a little different. He wanted to be there when Senators passed House Bill 1419

“I just imagined him and I riding together in a car like when he was a little child – had great memories,” Fritts said, smiling. “And you know, a lot of emotions in the past have been hard thinking about him. But today was one of the first times having, having good memories, you know, and laughing about all the crazy stuff he did when he’s a child.”

Fritts said after his son disappeared, it took nearly two years to identify Joseph’s remains. He said a law like this would have saved his family a lot of heartache and torture. 

Named after his son and John Almendarez, another Houston resident, “John and Joseph’s Law” passed the Senate unanimously and is now headed to Gov. Greg Abbott. 

It would require law enforcement, medical examiners and justice of the peace to enter case details including forensic information into the National Missing and Unidentified Persons System or NamUs

Those details would include fingerprints, dental records and descriptions of missing children or persons and must be entered into NamUs within a certain timeframe. 

Once Gov. Abbott signs the bill, Texas will be among 10 states with similar requirements, which is a direct result of KXAN’s “Missing in Texas” investigation. 

State Rep. Lacey Hull, R-Houston, started working on the legislation before the session even started after meeting Fritts while block walking in his neighborhood during her campaign. 

“I am overwhelmed by the unanimous support that John and Joseph’s Law has received from both the Texas House and Senate,” said Hull. “I truly believe that this law will make a huge impact on missing persons investigations and help Texas families who are searching for missing loved ones. Tomorrow I will be sending a letter to Gov. Abbott to ask that he sign HB 1419 into law.”

According to Hull’s office, Gov. Abbott has 10 days to sign the bill, excluding Sundays. Otherwise, it goes into effect on Sept. 1 unless it’s vetoed. 

The law is also named after John Almendarez from Houston. (Courtesy: Alice Almendarez)
The law is also named after John Almendarez from Houston. (Courtesy: Alice Almendarez)

“This is something that really needs to happen. This is something that’s long overdue, it matters,” said Alice Almendarez, John’s daughter.MOST READ: Austin police officer shortage forces downsizing at 14 APD departments 

She has been pushing for the bill for years and watched online with her family as the gavel came down, and the bill was voted on by the Senate. 

“It was special to hold my little John Joseph as I heard the final reading,” said Almendarez, who named her son after her father. “I’m really happy that it’s finally going to pass. It’s finally going to be reality, and a lot of families who are waiting for help are going to actually get it now.”

She said it took her family more than a decade to find her father. 

She testified in May and told lawmakers that had his information been entered into NamUs after his missing persons report was filed, they would have found his body sooner. 

Alice Almendarez with her son after learning House Bill 1419 passed the Senate. (Courtesy: Alice Almendarez)
Alice Almendarez with her son after learning House Bill 1419 passed the Senate. (Courtesy: Alice Almendarez)

“I’ve been able to help other families, and they would not have been able to make the connection to their loved ones without the database. And so I really believe that it’s, you know, it’s gonna help, it’s gonna help solve so many cases,” explained Almendarez. 

She and Fritts have worked together on this bill over the last several months. They explained it’s an empowering tool for even families, who can log on and search the database for their loved ones.

David Fritts drove to Austin early Wednesday to witness Senators pass “John and Joseph’s Law." (Courtesy: David Fritts)
David Fritts drove to Austin early Wednesday to witness Senators pass “John and Joseph’s Law.” (Courtesy David Fritts)

It would not cost Texas any additional dollars to implement the law since NamUs is federally funded. 

“You feel like you’ve never done enough and could never stop. And just the frustration and the heartache. And you know, it’s hard to relate to people or other people to relate to you, you know, looking for your your child for years. And I think it’ll help, you know, it’ll help families not have to go through that,” Fritts explained.

TWC’s $129M contractors never trained to resolve ‘complex’ unemployment problems

It took less than a week for Sonya Andrews to hit the bottom after a change in her unemployment benefits stopped her payments. Within days, she was homeless and begging for change in Killeen.

Her unemployment payments stopped, without warning, on Dec. 26. When she couldn’t make the Jan. 1, rent payment, Andrews got kicked out of a friend’s house where she was renting a small room.

Sonya Andrews asks a couple for money in a Killeen parking lot on Feb. 5, 2021.(KXAN Photo/Jody Barr)
Sonya Andrews asks a couple for money in a Killeen parking lot on Feb. 5, 2021. (KXAN Photo/Jody Barr)

“I live out of a bag and it’s no fun,” Andrews said as she rummaged through her backpack in a parking lot. The bag, stuffed full of everything she now owns, rides on her back as she applies for jobs and begs for change. We went along with her to document her case after she wrote to KXAN in February asking for help getting in contact with the Texas Workforce Commission.

“I’m sorry to bother you. Can I ask you a question?” was the same introduction Andrews used a dozen or more times. She had to speak quickly, only a few seconds with each person in the parking lot.

“Because of unemployment, I’m out here on the streets. I’m trying to get something to eat and maybe enough for a room. I’m not asking for a whole bunch; pennies, anything that you can please help me with,” Andrews told another person.

Some gave. Others said “no.” A few apologized. Her existence, as she put it, was “disgusting.”

“I can’t say I’m a perfect person. Nobody is. But, it makes me wonder is this, like, making up for what I’ve done? God’s not that way. I was told this recently, and it’s what’s getting me through because there’s been times, I feel like giving up. But someone told me, ‘God sends his strongest warriors in his toughest battles,’” Andrews said as she shivered in the parking lot.

By giving up, Andrews clarified, there were times she said she didn’t want to live.

TWC contractor ‘frustrated’ over inability to help unemployed Texans 

Andrews has a criminal record and after getting out of an Arizona prison four years ago, she moved back home to Killeen. She was already “living on the edge” as she put it and having a felony conviction meant she lost most competitions for jobs against younger applicants with clean records.

By the time we met her, Andrews had spent five weeks begging for enough money each day to get a hotel room for the night.

When the pandemic hit last March, Andrews was doing well enough. Her “Sonya’s Mobile Detailing” business was keeping her busy, housed, fed and employed.

Sonya Andrews shows off the first car she detailed when she opened her "Sonya's Mobile Detailing" business. After the pandemic forced people into isolation, her business crumbled. (KXAN Photo/Jody Barr)
Sonya Andrews shows off the first car she detailed when she opened her “Sonya’s Mobile Detailing” business. After the pandemic forced people into isolation, her business crumbled. (KXAN Photo/Jody Barr)

A look at her Facebook business page shows evidence of a job well done. Several comments and posts show satisfied customers who paid her $70 for automobile detail work. March 16, 2021 was the last post on the page.

“That was my last detail for my business,” she said.

With the statewide shutdown, Andrews – like millions of other Texans – turned to the TWC for help. The self-employed typically do not qualify for unemployment benefits, but with a change in federal unemployment regulations, she did qualify.

From May through Dec. 26, Andrews survived on unemployment. Then, she encountered a problem after the CARES Act expired on Dec. 26 and then got extended.

Andrews, like many others who contacted KXAN in January 2021, was caught in a glitch that only a TWC agent could correct. After hundreds of calls, she only ever reached a contracted call center worker. Each time she was told they couldn’t help her.

Frustrated and desperate, Andrews decided to contact a local TWC office.

Sonya Andrews cried as she talked about her grandson asking to spend the night with her as she tried to hide from him the fact that she does not have a home. (KXAN Photo/Jody Barr)
Sonya Andrews cried as she talked about her grandson asking to spend the night with her as she tried to hide from him the fact that she does not have a home. (KXAN Photo/Jody Barr)

“I was told by the workforce here in town that they would call back in 24 hours. That was 3 days ago,” she said. “I was told by the unemployment people that called me; everything is going to get fixed. Somebody will call you in three to seven days. It’s been 10 days and nothing.”

Andrews was able to collect $60.09 to spend the night in a hotel. It was already past 9 p.m. when she booked it.

She hadn’t eaten a meal that day.

“There’s nothing for food, so I have to pick sometimes: do I want somewhere to stay for the night or do I want to eat? Some days I’m lucky and I get enough for both,” she said.

Texans continue to struggle paying back TWC overpayment claims 

Andrews ended up with room 214 at a hotel with a 2.8 Google reviews rating. As soon as she slid the card into the door, she rushed inside to charge her phone and logged into her TWC account. It showed $16,038 in total payments.

“Every week, $726 — so $1,400 every two weeks to nothing,” Andrews said. Her Dec. 27 payment showed $0.

“I feel degraded. Where I was until now, I shouldn’t be like this,” Andrews told KXAN. “I’m not even proud to say I’m from Texas right now.”

Since the pandemic hit, KXAN heard from multiple contracted call takers. Each has the same story: they cannot help when a claimant calls with problems with their unemployment account. Each said they were only authorized to help callers file an initial claim or to make minor modifications to personal information in the claim.

Jamie Canfield has tried since January to find out if employment records she uploaded to her TWC account were received. Canfield said multiple contracted TWC call takers have been unable to help her. (KXAN Photo/Jody Barr)
Jamie Canfield has tried since January to find out if employment records she uploaded to her TWC account were received. Canfield said multiple contracted TWC call takers have been unable to help her. (KXAN Photo/Jody Barr)

“Everyone that I spoke to was like, ‘Oh my God, I finally got through to somebody. Thank God, I’ve been on hold for hours already.’ And in my head, I’m like, ‘I’m sorry, ma’am,’ or, ‘Sir I can’t help you, but let me go ahead and try to transfer you where you can be on hold even longer if you can get through,’” a contracted call-taker told KXAN.

The contractor asked not to be identified. We confirmed his employment through hiring documents he provided in email chains between himself and his contract employer.

“We were trained to file claims over the phone; to file claims and only file claims,” the contractor said.

TWC Executive Director Ed Serna told KXAN in September that his agency hired five contracted call centers to increase the agency’s call takers from 430 to more than 1,600. The agency spent $129 million in tax dollars to pay the contracts.

TWC looking for $203M in unemployment it should have never paid out 

In the September 2020 interview, Serna disputed claims that contractors could not help claimants at the same level as a TWC agent when they called.

“Everybody that answers a phone has the authority to make a change to that claim,” Serna said in the September interview, “So, all 2,000-plus people that are answering calls for us have that authority.”

“The idea’s that you call, you get the help and if you’re a contractor and you don’t know, then we’ll get you more training or, quite frankly, replace you — get somebody that can get the job done.”

ED SERNA, TEXAS WORKFORCE COMMISSION DIRECTOR (SEPTEMBER 2020)

The contractor problem still isn’t fixed. We went to Jamie Canfield’s home two weeks ago and waited while she dialed the TWC’s only toll-free number to reach the unemployment claims department. It took multiple calls before the phone connected.

TWC Executive Director Ed Serna asked for "help" in May 2020 to assist the agency in contacting unemployed Texans who were having trouble getting through to the TWC's 1,000-plus call takers. (KXAN Photo)
TWC Executive Director Ed Serna asked for “help” in May to assist the agency in contacting unemployed Texans who were having trouble getting through to the TWC’s 1,000-plus call takers. (KXAN Photo)

The woman who answered the phone immediately identified herself as a contract worker. The worker told Canfield she only had limited access to her account and could modify addresses and personal identification numbers. The woman explained contractors were in place to help alleviate the call volumes to the TWC.

All Canfield needed to unlock her benefits was for someone to confirm employment records she uploaded in January were received. She hasn’t had an unemployment check in more than four months and can’t get anyone with the TWC to talk to her.

Canfield’s even used the chatbot feature on the agency’s website and maxed out the number of requests for call back with it. The contractor apologized for not being able to help and said she was frustrated with not being able to help Texans who call.

Workers alleging wage theft face months-long wait for TWC investigations 

The contractor attempted to transfer Canfield to a TWC agent, warning her before she did that it’s rarely successful and that she personally could only get a few calls to connect each week. After several minutes on hold, the line disconnected.

Within hours of publishing this article, the TWC had an agent call Canfield to help her with the claim she initially filed last year. KXAN submitted Canfield’s name on the May 7 list for a call back from a TWC agent.

“I kept asking him, why did it take all this time but he wasn’t in the mood to talk about it,” Canfield told KXAN after she finished the call. Canfield said the TWC agent told her the reason they called now was because, “‘You had been trying to reach us and I’m returning calls’ and he did say they knew I had contacted my representative and there is a news story,” she said.

“If one of the contract workers could have told me that early on I wouldn’t have kept calling on and on for the past five months,” she told KXAN. “I’m still applying for jobs now,” she said.

Canfield mentioned she’d gotten two more pieces of art commissioned which would provide her some income in the meantime.

Jamie Canfield holds a portrait she painted of her mother who died in 2019. Canfield, who paints as a hobby, worked for the U.S. Census bureau until she was laid off in November 2020. (KXAN Photo/Jody Barr)
Jamie Canfield holds a portrait she painted of her mother who died in 2019. Canfield, who paints as a hobby, worked for the U.S. Census bureau until she was laid off in November 2020. (KXAN Photo/Jody Barr)

“Of all the calls we’re getting, we’re transferring off 80 to 90% of them. And, of those that are transferring, you might get, like, one or two calls per day that you actually hear successfully get connected to the TWC line where they’re waiting on hold,” the contractor who asked not to be identified told KXAN.

He quit his job in February and contacted us the next day to tell his story about what was happening inside the TWC.

“I don’t know if I’m allowed to — words I can and can’t say— yeah, that’s bulls–t. The contracted reps can’t do much. And, it’s not on the contracted companies either because they train us with the material that was given to them. So, yeah, he’s (Serna) either just not aware at all as to what’s happening, or he’s talking out of his a–. Either one’s a really bad look.”

In the eight months since our first interview with the TWC’s top official, it turns out not every contracted call taker can do what Serna said he expected them to do: help Texans when they call for help. Serna was not available to be interviewed when we asked to speak with him for this report.

The TWC instead provided James Bernsen, the agency’s Deputy Director of Communications.

Bernsen said the agency is still seeing high call volumes: 1.7 million calls each month. On May 5, the day before our interview, the TWC reported 491,000 calls to its call centers.

“That’s 681 calls per minute,” Bernsen said. “With this volume, as you can imagine, we can’t just take everybody off and put them through the rigorous training that we do for TWC employees year to year. That being said, we have made some really good strides in training some of these folks.”

The agency said it has trained some contractors to do what a TWC agent can, but admitted with the limited time on the job at this point, the agency can’t get the contractors to where they need to be.

Texas Workforce Commission opens additional call center to process more unemployment filings 

“TWC staff who are working full time, they’ve gone through a process that sometimes takes up to two years to train them fully in the ins and outs of the of the unemployment system; all the rules and all the laws and how they apply. And, so, we bring in these contractors, they can’t learn all that stuff on the job,” Bernsen said.

Although limited, a contractor’s ability to edit a PIN on an account “are very important tasks,” according to Bernsen. The PIN is a target of those working to commit fraud against the agency and a “large percentage” of the calls to the TWC call centers. Having contractors handle those helps TWC agents deal with “more complex questions,” Bernsen said.

Of the thousands of TWC complaints KXAN’s received since the pandemic, PIN issues have not been an element of those complaints since early in the pandemic. In the past year most every complaint dealt with some other claim trouble.

Another problem plaguing the call centers is people calling with questions that have nothing to do with unemployment. The TWC reported many calls tying up its lines are questions about Internal Revenue Service stimulus checks or questions about unemployment where answers are already posted on the agency’s website.

“It’s really kind of a ‘chicken and the egg’ and we’re trying to make sure that we get those contractors trained, but we also have folks there to handle the vast volume,” Bernsen told KXAN. “We’ve been improving the system. We’ve added the call centers, and we’ve made a lot of progress. But, as you say, we still have a long way to go and we’re still continuing to work towards improving that system.”

Sonya Andrews sighed in frustration when she checked her TWC debit card to find nearly $3,000 in delayed benefits had not been deposited. (KXAN Photo/Jody Barr)
Sonya Andrews sighed in frustration when she checked her TWC debit card to find nearly $3,000 in delayed benefits had not been deposited. (KXAN Photo/Jody Barr)

Sonya Andrews’ five weeks of living on the streets ended just days after we submitted her name to the TWC. Since last summer, we’ve submitted 1,738 names to the TWC — all people who contacted KXAN with stories of not getting help when they contacted the agency’s call centers.

It took three days for the TWC to get to Andrews’ name. Her claim was fixed faster than it took the TWC agent to introduce herself.

TWC was 1 month away from hiring firm to replace computer servers before pandemic hit 

“It took two seconds,” Andrews said. “Really? It was that easy? That’s all it took, I mean, more of me answering the phone saying hello than for her to fix it.”

Within hours, $1,800 dollars in delayed unemployment funds were deposited to her TWC debit card. Later that day the remaining $922 the TWC owed her also landed on her debit card. Andrews’ first stop was to rent an extended stay motel where she didn’t have to worry about where she’d sleep for the next seven days.

“I’m going back to look for work now. I can now work to get my detailing business back instead of spending the day begging for scraps and calling the unemployment office. I’ve got a small part of my life back,” Andrews said.

KXAN filed an open records request with the TWC asking for complaints, audits and whether any contractor had been sanctioned by the TWC. The agency responded with a cost estimate of $711 to provide all the records we requested for this investigation. The agency provided contracts and the total paid to each contracted call center used in this report without charge.

Cybercriminals steal nearly $1B from Texas unemployment fund

Texas is under attack. So is nearly every other state in the union. The assault is silent and those hit don’t know they’re hit until it’s too late.

“My husband received two different notifications from the Texas Workforce Commission informing him that he had applied for unemployment insurance,” Lisa Martin said, holding the tri-folded notification letters.

Lisa Martin shows the unemployment notice saying her husband would receive benefits of $535 each week. The TWC later told the Martins the claim filed in his name was fraudulent. (KXAN Photo/Jody Barr)
Lisa Martin shows the unemployment notice saying her husband would receive benefits of $535 each week. The TWC later told the Martins the claim filed in his name was fraudulent. (KXAN Photo/Jody Barr)

There was one problem: Miller’s husband isn’t unemployed. He’s worked for the Texas Department of Transportation for years.

The TWC letter shows Miller was set to receive $535 weekly with a total eligibility of up to $13,910. Someone, somewhere, stole her husband’s personal identifying information – including his social security number – and filed a claim.

The state caught the fraud in one of its basic fraud checks. The TWC sent notification letters to the Martins and to TxDOT. Both were able to notify the TWC of the fraudulent claim immediately.

“I kind of credit his employer, who is TxDOT, with quickly notifying the Texas Workforce Commission and hopefully stopping things before they’ve gone too far,” Martin told KXAN. “And, I know that when my husband spoke with people in the human resources department, some of those people themselves had just had their information taken. So, they were quite familiar with this.”

Since January, TxDOT said it received 529 fraudulent unemployment claims filed using stolen identities of employed TxDOT workers. The Martins also received a letter from the TWC confirming the unemployment application was an act of fraud.

The Martins have placed locks and monitoring on their digital identities and filed a report with the Austin Police Department.

TWC looking for $203M in unemployment it should have never paid out 

“We haven’t been contacted by anyone. We have a report, number, a summary incident report with the Austin Police Department. They wanted to know whether we knew who had committed this fraud, and of course, we don’t,” Martin told KXAN investigator Jody Barr.

“Do you have any confidence that the person or people who did this to you all will ever be caught?” Barr asked.

“No. Not at all,” Martin replied.

Since March 2020, the TWC’s received 5.1 million unemployment claims with an average of 81,000 claims each week. In May, the TWC told KXAN the agency received 737,000 “suspicious claims,” meaning ones the agency suspects were fraudulent.

Between March 2020 and May 2021, the TWC reports losing $893.5 million in payments to fraudulent unemployment applications.

To figure out how this happened and why the state’s identity theft prevention systems allowed the nearly $1 billion theft to occur, we decided to interview the man who helped develop and perfect the systems cybercriminals around the world used to steal nearly $1 trillion from the nation’s unemployment system since last March.

Convicted of 39 felonies, Brett Johnson was dubbed the “Original Internet Godfather” by federal investigators.  

“So when you tell me $893 million, I’ll tell you that’s what they know about. I want to say it’s double, maybe triple that just in the state of Texas,” Johnson estimated.

Johnson, once a U.S. Secret Service “Most Wanted” fugitive, served seven years in Texas federal prisons for helping to steal identities to commit fraud. He was one of 28 cybercriminals busted in a 2004 federal investigation known as “Operation Anglerphish.” Johnson helped found ShadowCrew, the precursor to today’s Dark Web.

Johnson, now reformed, works as a consultant for the federal government and private corporations to help fight the crime he helped perfect.  

Johnson estimates his thefts totaled $7 million between 1998 and 2006.

“I was very fortunate that I was given the opportunity through the FBI, and with the help of my wife and sister, I found that reformation. I was given a chance to use all the knowledge I’ve got to help people instead of hurt people,” Johnson told KXAN.

TWC chairman responds a week after KXAN questions ongoing unemployment problems 

The TWC reported 1,142 fraud claims in all of 2019. Amid the pandemic, between March 2020 and August 2020, the TWC saw its 2019 fraud claim numbers triple to 3,500. Between September 2020 and May 2021, the TWC reported 735,000 fraud claims and a loss of nearly $1 billion.

“These numbers continue to explode. And, the reason why is that cybercrime is not rocket science. It does not take a genius to commit these types of crimes,” Johnson said.

All a criminal needs is what’s known as Personally Identifiable Information, or PII — your name, address, birth date, email address, banking information — anything that can be used to take on a victim’s identity.TWC call center contractor: ‘Someone needs to be held accountable’ 

Criminals, seeing the trillions of dollars flowing into the nation’s unemployment agencies, went on the attack.

Brett Johnson was convicted of 39 felonies related to a cybercriminal network he founded in 1998. Johnson now works as a consultant for private corporations and the federal government. (Courtesy Brett Johnson)
Brett Johnson was convicted of 39 felonies related to a cybercriminal network he founded in 1998. Johnson now works as a consultant for private corporations and the federal government. (Courtesy Brett Johnson)

“The pandemic shut down the economy in six weeks. They knew if they didn’t get money out quickly, that the — that the whole thing was going to go belly up. So, they put these stimulus programs in place. But guess what? They didn’t put any security in place. And, I mean, no security, no controls in place at all,” Johnson said.

A chief executive with Lexis Nexus, a private identity theft company, said his company’s review of U.S. unemployment systems puts it at a level to be considered a national security threat.

“Transnational criminal groups, primarily from Russia, Nigeria, and China, took advantage of the fact that the unemployment insurance systems in this country were more focused on program integrity, and not focused on imposter fraud,” said Haywood Talcove, who heads Lexis Nexis’ government division.

“There hasn’t been a state in the country that we’ve looked at, that hasn’t seen fraud rates between 35 and 40%,” Talcove said. Typical fraud rates hover between 8% and 10%, according to Talcove.

Talcove considers Texas’ fraud to be a “complete lack of planning” spread between the nation’s government internet technology departments and unemployment agencies.  

“Now, in their defense, I don’t think they ever would have suspected that transnational criminal groups would have infiltrated the system at this scale,” Talcove said, citing a U.S. Department of Labor statistic.

The Texas Workforce Commission said it could have stopped nearly all of the $893.5 million in fraud payments that ended up in the hands of identity thieves. But, doing so would have created massive delays in unemployment payments to those who truly needed them.

“If we had a system that was ironclad that stopped all fraud, it would slow the system down so that those folks that you were talking about who are struggling to get by and could be losing their houses, their payments might be delayed by weeks and months,” James Bernsen, the TWC’s Director of Communications, told KXAN.

James Bernsen, TWC's Director of Communications, said identity theft fraud against the Texas unemployment system has never slowed down since the start of the pandemic. (KXAN Photo)
James Bernsen, TWC’s Director of Communications, said identity theft fraud against the Texas unemployment system has never slowed down since the start of the pandemic. (KXAN Photo)

TWC figures show the agency went from an average of 7,000 monthly unemployment claims to 1.3 million claims during the first month of the state’s shutdown in 2020. The state’s priority was to pay the avalanche of claims while trying to identify and fight the fraud within those claims.

“You really have two things that you’re trying to do in an unemployment system: you’re trying to pay out benefits quickly, and you’re trying to stop fraud,” Bernsen said.

Bernsen said the TWC didn’t initially notice its 2019 total fraud claim numbers had tripled between March and August. Agency records show 1,142 claims in all of 2019. By August 2020, that number for the year grew to 3,500.

TWC has paid out more than $11B in COVID-19 unemployment benefits, and most are federal funds 

“With 3,500, even that number is really manageable with the staff and the processes we had in place. That was about the time though, when we saw, like I said, that this didn’t just start off, you know, day one, zero to 60. It started slowly, gradually increasing. And, as we saw that we started looking at the need for this, and the need of putting in a dedicated system for this,” Bernsen said.

The agency’s basic theft protections were in place from the start.

Once an unemployment claim’s filed, the TWC sends notification letters to both the applicant and employer. At that point, either side would know whether the claim is authentic and can notify the TWC if it is not. The agency said it has other internal fraud prevention processes in place but would not explain what those are.

KXAN filed an open records request with the TWC, asking for records showing whether the agency implemented additional identity theft prevention into the system after the pandemic hit.

“This is the Super Bowl for fraudsters. They want to try to get access to all this money, this money that’s available in all the states in America. And we’ve seen that and we stopped it in a lot of cases,” Bernsen said.

On Oct. 30, the TWC signed a $1.7 million contract with ID.me, a private company that specializes in identity verification. Part of what the company uses to ensure the person filing the claim is actually the claimant are government documents like a driver license and has claimants upload selfies.

TWC contractor ‘frustrated’ over inability to help unemployed Texans 

But, the TWC said ID.me was not intended to catch fraud — only to verify a claimant once fraud was detected in an account.

“So it’s not the fraud that precipitated the need for ID.me, but the need to clear the fraud holds,” Bernsen told KXAN.

That system didn’t go into place until November 20, 2020, eight months into the pandemic.

“Obviously, we’d like to have brought that in as quick as possible, and anticipatory. But, again, these were issues that really no state had ever seen before. And, so, we brought it in as soon as we determined that this was an important need. And we started working to put that system in place,” Bernsen told KXAN.

TWC contractor ‘frustrated’ over inability to help unemployed Texans 

The TWC reported $49.2 billion in unemployment benefits paid to 8.1 million Texans since mid-March 2020. The agency reported “preventing” $9.4 billion in fraud claims during that time, but $893 million was paid out to suspected fraud claims.

Despite losing nearly $1 billion to fraudsters, Bernsen said the TWC is doing “very well” in its fraud prevention. Bernsen pointed to California’s unemployment system that lost $400 million to fraud after identity thieves used prisoner PII to claim benefits.

“We don’t even have that issue because we check our claims against our prisoner database. The total California UI fraud is $11 billion (LA Times source for both), which is more than 12 times more than the total Texas fraud identified,” Bernsen wrote to KXAN in a response to our request for an interview with Gov. Greg Abbott for this report.

Abbott told FOX News earlier this week he plans to end Texas’ extended unemployment benefits. Part of his reason was the governor said businesses were concerned “about a lack of availability of a workforce” and the state had more job openings than people on unemployment.

Abbott also cited a TWC figure that 18% of all Texas’ pandemic unemployment claims were fraudulent. The figure aligns with the same statistics the TWC provided KXAN.

“So, we need to get people off of the unemployment line and get them back into the workforce so they can be earning a paycheck,” Abbott said in the FOX News broadcast.

The governor appoints each of the three TWC commissioners.

Abbott did not respond to KXAN’s request for an interview, but his office sent the TWC our request for response. Abbott’s office had not responded to any request from KXAN to be interviewed on this topic since our investigations into the TWC started in 2020.

Submit a tip about Texas unemployment issues during the pandemic 

Bill requiring public reporting on diseases in nursing homes heads to Governor’s desk

A bill that would make the number of cases of diseases found in long-term care facilities public has been sent to Governor Greg Abbott’s desk, after passing out of the Texas House and Senate last week.

Senate Bill 930, authored by Sen. Judith Zaffirini (D-Laredo) and sponsored by Sen. Lois Kolkhorst (R-Brenham) and Rep. Mayes Middleton (R-Wallisville), will make public the number of residents diagnosed with a communicable disease at nursing, assisted living and continuing care facilities in the state. The facility names and locations will be public, but personal health information and individual residents’ names would not be released under the law.

Several other similar bills, including House Bill 3306, were filed this legislative session after COVID-19 ravaged senior living facilities across the state for the last year.

PREVIOUS COVERAGE: Texas bill to make disease cases in nursing homes public advances in House

“There have been countless news stories dealing with the struggle that families went through in the pandemic and trying to find out if an outbreak of COVID had occurred in a facility that housed their family member,” Middleton said at the hearing for HB 3306. “That tragedy reveals a gap in our transparency laws for these types of facilities.”

KXAN investigator Avery Travis testified on behalf of this bill in the House Human Services Committee, detailing the hundreds of calls and emails the KXAN team received from family members and residents — all concerned about what was happening at their loved ones’ facilities.

  • For an in-depth look at how the pandemic affected nursing home and assisted living facility residents, check out KXAN’s complete coverage here.

According to reports from families and senior care advocates, many of the state’s 1,200 skilled nursing facilities and more than 2,000 assisted living facilities provided basic information — but they were not required to release it.

One family told KXAN it was stressful trying to move their father to a new facility, without knowing about any outbreaks inside. Another family told KXAN they heard one thing from facility administrators and something else from residents and staff about how many cases or deaths had been reported.

The federal Centers for Medicare & Medicaid Services released public records detailing outbreaks in skilled nursing facilities, which they regulate in June 2020. However, KXAN investigators discovered CMS’ information was incomplete and only showed cases reported since late May. CMS’ data also did not include information on state-supported living centers or assisted living facilities.

BACKGROUND: HHSC finally releases detailed COVID-19 nursing home data

Beginning in the spring of 2020, KXAN, the Freedom of Information Foundation of Texas, and numerous other news outlets requested data from the Texas Health and Human Services Commission. In July, the Texas Attorney General ruled that information could be made public without violating health privacy laws, and the state began providing data, updated daily.

SB 930 aims to make those types of reports releasable under Texas law moving forward.

“Never again will our families be left in the dark as to the health and safety of their loved ones,” Zaffirini said in a previously reported statement.

According to the latest state data, Texas has reported 80,938 cases of coronavirus in nursing homes and 10,103 in assisted living facilities. 8,987 people have died from the virus in nursing homes, along with 1,551 people in assisted living.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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