60% of VEC website login attempts fail | Fraud-riddled agency still ranks among slowest in nation

RICHMOND, Va. (WWBT) - The On Your Side Investigators have continued to track the Virginia Employment Commission’s overhaul effort after its painful performance during the pandemic.

The agency’s major problem is an estimated $1.6 billion lost to fraudulent unemployment claims. The VEC confirms it’s working to investigate nearly 280,000 fraudulent claims since March of 2020.

During the pandemic, hundreds of thousands of Virginians waited desperately, for months, for unemployment checks. People couldn’t get through VEC’s call line, as the agency was drowning in a tsunami of claims, a lack of staffing and outdated technology. So, the state began rushing out benefit payments without thoroughly vetting cases. As one can imagine, many gamed the system.

“Our potential fraud, which is what we’re working through in a significant way right now, is over $1.5 billion,” said VEC Commissioner Carrie Roth. Roth is the agency’s new commissioner, appointed by Governor Glenn Youngkin.

Roth said $100 million is already confirmed as definitely being stolen. The rest of the $1.6 billion is still being investigated. The VEC is now partnering with the state attorney general’s office to prosecute fraudsters targeting your tax money.

“We’re going to go after the rings...and we’re going to go after individuals,” continued Roth.

For example, Sadie Mitchell, 30, from Midlothian, recently pleaded guilty to stealing more than $1 million in government assistance during the pandemic. Prosecutors say Mitchell filed at least 20 fraudulent unemployment claims using inmates’ identities and an accomplice. She now faces up to 30 years in prison.

To help combat future fraud, VEC’s new website, which went live last fall, has a slew of safeguards. However, NBC12 found those safeguards prevent many legitimate claimants from accessing the website. About 60% of Virginians who now try to log in - can’t, according to the VEC’s data.

“When I try to log in, it tells me I’m not in the system,” said Dyan Stanley. “And when I try to create a new login, it tells me I’m already in the system.”

Stanley still can’t log in to the VEC’s new user portal to make filing claims easier for both claimants and employers.

Stanley’s unemployment claim was denied last year because she was mistakenly flagged for fraud. She says her attempts to rectify the situation with VEC representatives have been futile.

“I’ve sent them three sets of proof of my identity… I call at least every other day, if not every day,” she said.

Yet, Stanley hasn’t received a dime. After NBC12′s story aired, Stanley said VEC rectified her issue, and she no longer owes the money.

Attorney Pat Levy-Lavelle with the Legal Aid Justice Center headed up a class-action lawsuit against the VEC for its inability to get benefits out in a reasonable time frame in 2021. That federal lawsuit has since been settled, with the VEC working to clear 92,000 backlogged claims mounted during the height of the pandemic.

Levy-Lavelle now says many complaints center around people being locked out of the VEC’s new website.

“These are bona fide claimants who are trying to send in the documents that have been asked of them. But they’re not getting answers, and they’re still locked out of getting benefits due to these alleged unresolved identity issues,” said Levy-Lavelle.

“We have pretty strict safeguards on it,” said Roth. “We’re continually running tests, making adjustments… It’s a balance we’re trying to strike to make sure we’re not keeping the Virginians who have earned these benefits out. But we also have to be mindful that those who are bad actors are also seeking new ways (to hack the system) too.”

Roth says the VEC has a team of 75 employees working to resolve red flags caused by claimants improperly targeted for fraud.

“But I will tell you, in those phone calls we have made to folks, about 50% are lines that are disconnected, or… nobody returns the phone call,” she noted.

A new state law that went into effect July 1 also requires employers to file electronically with the VEC. Roth says that will help speed up claims and weed out fraud. She says the VEC is also installing new online technology to verify someone’s identity more quickly if they’re flagged for fraud.

In addition to technology upgrades, since the summer of 2021, the VEC has added about a thousand employees. According to the Joint Legislative Audit and Review Commission, it was a long wait to get the additional staff, despite the VEC being in crisis mode and unprepared to handle the spike of 2 million unemployment claims.

“When the pandemic hit the VEC, the agency was at a 50-year low in funding, as well as receiving in one week - 50 times the normal number of unemployment claims. So, it really set up a perfect tsunami,” said Roth, who was not commissioner during the height of the pandemic. “They had outdated technology and no clear pathway for how to handle this workload.”

“The agency did not get any assistance with additional staff until one-and-a-half years into the pandemic,” she continued, noting the VEC had to wait months for the General Assembly to approve the funding.

The VEC currently has over 1,800 employees, compared to just 800 in March 2020.

“Just in the call center alone, there was an additional 500 folks. We’re actually in a place right now where we are ramping down,” said Roth.

But NBC12 continues to receive complaints every week from people waiting on benefits, who need their cases resolved or who can’t get through to the VEC, particularly online.

“I’ve sent them letters and called them and get no response,” said Mary O’Brien. O’Brien has received dozens of letters from the VEC saying she owes back $3,900 in unemployment overpayments.

More than 335,000 Virginians received that same overpayment notice, even though the mistake was no fault of their own. NBC12 confirmed the VEC is currently working to recover nearly $860 million in overpayments improperly made during the pandemic.

O’Brien filled out the waiver that would potentially forgive the money. However, she’s still receiving notices demanding she repays the money.

“They’re holding my income tax until they finish their investigation,” O’Brien added. The most recent data NBC12 found from the Department of Labor shows the agency is still lagging in critical areas.

Virginia ranks 10th from the bottom in getting first-level appeals resolved within 21 days for the first part of 2022. During the height of the pandemic, Virginia was second to last. Currently, the VEC is working through nearly 46,000 of these cases. As of August 1, Virginia is now sixth from the bottom, slipping four rankings.

As for second-level appeals, which require in-person hearings, Virginia averages a 310-day wait before the case is heard. That’s the second-worst in the country, with 52,000 cases currently on hold, during the first three months of the year. As of August 1, the Commonwealth ranks third slowest in the country, with a 298-day wait.

“The amount of work can’t be underestimated,” continued Roth, who says the VEC has made progress and is continuing to forge ahead with improvements. “These are real people with real lives that we are impacting.”

“What we care about is making sure every Virginian who’s filed a legitimate unemployment claim gets answers... gets a fair shot as soon as possible in getting their benefits. And there’s still a lot of people out there waiting,” said Levy-Lavelle.

The new state law also aims to ensure the VEC has more oversight and continues making progress. For example, the agency was ordered to simplify its documents for claimants, regularly get feedback from the public, make more IT improvements, and create a resiliency plan for the future to handle a massive spike in unemployment claims better.

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