HONOLULU (KHON2) — Thousands of out-of-work people in Hawaii are still struggling to get unemployment benefits sorted out nearly a year into the COVID-19 economic crisis.

This while scammers walk away with tens of millions — including in the names of people who never even filed a claim.

Some who say they got legitimate benefits are now being asked to pay large portions back, but identity thieves who may never be found likely made off with millions.

One sector the Department of Labor and Industrial Relations (DLIR) is paying close attention to is individuals who may have had unreported income during the pandemic.

“I think the numbers have been and still are enormous,” said Peter Yee, a volunteer moderator with the 26,000-member Hawaii Unemployment Updates & Support Group on Facebook. “It’s not to say that every case there is an actual overpayment, but it’s flagged anyway.”

Yee estimates there have been about 40,000 such over-payment cases since fall, 2020. Some of those folks say someone else must have made off with unemployment money in their name.

“We do have members that say your benefits have been exhausted and so forth, and they declare that they haven’t even applied for the extension yet,” Yee said.

Then there are those being asked for identity verification for the first time despite already receiving unemployment insurance payments.

“They do have to send in their IDs and pictures of themselves holding it now,” Yee said, “just like PUA.”

PUA is the Pandemic Unemployment Assistance program, plagued early on by imposter theft. The labor department ID check is all part of trying to combat what they say is the growing wave of unemployment fraud.

“It has gotten worse over the past couple of months,” said Anne Perreira-Eustaquio, director of the DLIR. “It started especially on the regular unemployment insurance side in November, and we have more and more fraud hitting our unemployment insurance system.”

The DLIR stopped disclosing the mounting fraud tally after it hit at least $45 million in stolen PUA in fall, 2020, plus fraudulent payments on the unemployment side. They said, hundreds of millions in suspicious claims were blocked, however.

People in Hawaii are already getting 1099s telling them how much unemployment paid out in benefits. Many people who never filed a claim are getting these tax forms, however. They are victims of imposter fraud by identity thieves filing in Hawaii residents’ names in the state and across the U.S.

“We are seeing more and more, not just claimants, but actual citizens here in Hawaii are receiving notices from other states saying, hey, you received 1099, because you received income from the state of Georgia or wherever it may be,” Perreira-Eustaquio said.

Fraudsters targeted people likely through credit-breached information. Large employers like the University of Hawaii even put out a security alert for college staff to be on guard.

So much money going out for fraud adds insult to injury for legitimate claimants whose benefits are exhausted early because a scammer got the rest.

“One member in our group reported the difference on her 1099 of $12,000, and she did contact unemployment, and they confirmed it,” Yee said.

If you get a 1099 for a claim you never made or with too high an amount above your legitimate benefits, let the DLIR know immediately or inform the labor department in the state from which you get any fraudulent letter or erroneous 1099. Follow steps on the IRS and federal identity theft reporting websites.

Thieves prey on the fact that each state has its own standalone unemployment database even though much of the funding — especially under COVID-19 — is federally backed. A nationwide system may be in store.

“They’re actually looking at a one-entry site for filing, and maybe catching the fraudsters that way,” Perreira-Eustaquio said of efforts in Congress to overhaul the system. “So we’ll see. Maybe in the future, filing unemployment may be very different than it is today.”

Unemployment claims and fraud have tapped out the state’s reserves and could have tripled unemployment tax rates for employers. Lawmakers on Wednesday, Feb. 24, sent the governor a bill to keep rates at a little above the 2020 rates for the next two years. The governor is expediting legal review because the rate hikes will hit employers in the first quarter if not fixed.