Like many Washington residents caught up in the state’s anti-fraud crackdown, Fabian Paracuelles didn’t think things could get any worse.
Since early May, when Paracuelles’ jobless benefits were suspended, the unemployed high-rise window washer from Graham has been trying to prove to the state Employment Security Department (ESD) that he’s not part of the massive fraud scheme that has siphoned off an estimated $550 million to $650 million.
This week, Paracuelles says, he learned that his bank account at Chase, where he’d been receiving his unemployment benefits, had been closed, and that “I can never bank with them again.”
Paracuelles says that although bank staff declined to explain why the account was frozen, he read on the teller’s screen that ESD had “put a fraud claim against me.” The result, says the father of four, is money “that’s supposed to pay for bills and whatnot is frozen.”
Paracuelles isn’t alone. At least nine people in Washington state say they’ve been locked out of bank accounts, including some at Chase, that were linked to unemployment insurance claims filed with ESD.
How many more cases there may be, or what’s behind them, isn’t clear. One state Senate official who is looking into the issue says it’s part of a “nationwide investigation” into unemployment fraud.
But some of the workers locked out from bank accounts say the action came after their benefits had been suspended as part of a crackdown against the fraud scheme that ESD disclosed in May.
At that time, the agency flagged the claims of nearly 200,000 Washington workers for possible fraud. In most cases, flagged workers were asked to supply ESD with additional proof of identity, such as photos of driver’s licenses and Social Security cards.
That was the story with Parker Butler, a furloughed worker with the parks department in the city of Vancouver, Clark County, whose jobless benefits have been suspended since mid-May.
On Wednesday, said Butler, who uses the pronouns “they” and “them,” ESD notified them that their identity had been verified and that benefits would soon resume being sent to their Chase account.
Unfortunately, a day earlier, Butler had learned that the Chase account had been “restricted and closed.”
That action appears to have occurred after ESD “reached out to Chase, asking about the fraud situation,” Butler said.
It may also relate to a broader investigation. Butler said they contacted their state senator, and was told by a Senate staffer that ESD knew of the Chase issue and had contacted federal law enforcement agencies and Chase about it.
But the Senate staffer also said in an email that the bank account issue is “related to the nationwide investigation, and not specific to ESD and Washington.” Furthermore, because the investigation was ongoing, “anything more specific than that is not able to be shared with our offices or the public.”
A Chase spokesperson said the bank couldn’t “comment on specific customer information for privacy reasons,” and declined to acknowledge whether the accounts of Paracuelles and several others in question had been locked or whether they were connected to the ESD anti-fraud efforts.
“We’ve received requests from the State of Washington related to the unemployment situation and we’re working with the state and law enforcement to address this issue,” the spokesperson said in an email.
Nick Demerice, ESD spokesperson, wasn’t able to say whether the agency had asked Chase to freeze any particular accounts as part of its ongoing fraud investigation, although he acknowledged that the agency had received reports of several similar incidents.
Demerice said the agency often works with banks in cases of fraud, and that freezing a suspect account is one way the agency recovers improper payments.
But the ESD would have to regard the risk of fraud as high before asking a bank to freeze an account, Demerice said. “There would have to be multiple indicators that it was a fraudulent account,” he said, adding that the agency would take intermediate steps, such as contacting claimants, before freezing accounts.
He said he thought the problem was showing up in only a very small number of claims.
Reports of the frozen bank accounts comes as the ESD has been working hard to process a backlog of tens of thousands of unemployment claims, some of which have been unpaid for months.
On Thursday, ESD Commissioner Suzi LeVine welcomed 50 National Guard troops who have been assigned to help the agency process claims.
For the fourth week in a row, new claims for jobless benefits in Washington fell as employers began rehiring and aggressive anti–fraud efforts continue to bite.
For the week ending June 13, the state received 29,028 new, or “initial,” claims for unemployment benefits, a decrease of 2.3% over the prior week, the state Employment Security Department reported Thursday.
The decline in state claims came as total U.S. claims fell 3.7%, to 1.6 million, the U.S. Labor Department reported Thursday.
For now, workers whose accounts are frozen are left in limbo.
Butler has been informed by Chase that they will “get a cashier’s check in the mail for the remaining positive balance,” but added that the “debacle” means more hours will be spent trying to reach ESD to try to straighten out the latest mess.
“I’ve never been involved in something so strenuous before with any government,” says Butler.