Audit finds up to $200 million in phony Frontline Workers payments

More than $200 million dollars of a $500 million Frontline Worker payment program went to people committing fraud or people with questionable eligibility.

That’s the main finding of a new audit into Minnesota’s 2022 payments.

A bipartisan legislature sent the $500 million "thank you" to people exposing themselves to COVID infection at work during the height of the pandemic.

But now, state auditors say 9.1% went to ineligible applicants, including fraudsters with somewhat sophisticated schemes entering applications in quick succession with disposable emails.

"We identified paid applications that had clear fraud indicators and we identified paid applications for which we could clearly determine the applicant was not eligible," said Legislative Auditor Judy Randall.

That includes 290 people who died before they received a frontline worker payment, and 26 people who used duplicate identification numbers.

In sampling several hundred applications, auditors deemed another 32% of approved applications to be unverified — because listed employers gave inconclusive answers to an auditors’ survey.

The program split up $500 million between eligible applicants, so with just over 1 million people getting payments, they each received about $487.

Payments most commonly went to people in retail, manufacturing, food service and health care.

Eliminating 41% of them for fraud or lack of confirmed eligibility would’ve increased the payments to $833 – a significant amount for some workers.

"Just extra money for my family," said a healthcare nutrition worker who told FOX 9 that she was expecting $900 or more. "Maybe more vacation time. With the prices of everything going up now, helping with that as well."

The Labor Department wasn’t asked to do employer surveys to confirm eligibility.

And officials say their verification system worked fairly well given the direction they got from the legislature to produce payments quickly.

"We have estimates of how many payments we prevented in going to fraudulent applications," said Dept. of Labor and Industry director Nicole Blissenbach. "I think a conservative estimate would be about 2 million."

Auditors say the program rejected about 200,000 of 1.2 million applicants.

They’ve referred some of the payments to law enforcement for investigation and possible prosecution, but auditors also found the Department of Labor didn’t comply with the state’s Official Records Act.

"They didn't retain any of the vital information for the agencies to be able to go back and do their own work of a post-audit type of follow up to make sure that we can recapture those," said Sen. Mark Koran, (R-North Branch).

So he expects very little back end recovery from even phony frontline payments.