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A Labor Department employee has been charged with fraudulently collecting unemployment benefits while maintaining a full-time federal job, highlighting a widespread problem of government workers double-dipping during the COVID-19 pandemic. Mo Yuong Kang, an industrial hygienist with the Occupational Safety and Health Administration, earned a $90,000 annual salary from 2020 to 2021 while simultaneously collecting nearly $46,000 in pandemic unemployment benefits from April 2020 through September 2021.
Sen. Joni Ernst of Iowa has called attention to what she describes as a persistent fraud problem, estimating that hundreds or thousands of government employees may have illegally collected unemployment benefits while employed. She has requested that the Labor Department inspector general cross-reference employee lists with unemployment beneficiary records to identify overlapping cases.
The fraud extends beyond federal workers to state and local government employees. In Ohio, a contract employee at the state unemployment agency collected benefits for eight months while working and manipulated claims to increase payouts for associates, resulting in $112,240 in fraudulent payments. Sandra Schnieders, the customer service assistant involved, pocketed nearly $19,000 herself.
The pandemic emergency created ideal conditions for widespread unemployment fraud, with estimates suggesting 40% to 50% of the $800 billion in federal unemployment assistance involved bogus claims. Congress prioritized speed over fraud prevention, directing state agencies to eliminate eligibility checks and allow self-certification of unemployment status.
Cases span multiple agencies including the Social Security Administration, Small Business Administration, IRS, Amtrak, and U.S. Postal Service. A Texas Social Security employee received 24 months in prison for identity theft and fraudulent applications, while an SBA employee approved a $170,000 pandemic loan for herself after it was initially denied.
State-level fraud has also been significant. A Michigan unemployment examiner received 41 months in prison for processing fraudulent claims for incarcerated individuals in exchange for bribes, resulting in $1.5 million in improper payments. A Louisiana unemployment agency employee stole over $200,000 by reactivating inactive accounts and routing payments to herself.
Sen. Ernst emphasizes that federal worker fraud represents an “inside job” and should be easily detectable since the government maintains both employment and unemployment benefit records. She suggests that fear of exposure may explain federal worker resistance to the Department of Government Efficiency’s access to agency files.
The Labor Department inspector general has acknowledged receiving Ernst’s audit request, though not all cases necessarily involve intentional fraud, as some workers may be victims of identity theft with fraudulent applications filed in their names.
Read more: Double-dip: Senator demands crackdown on feds pocketing unemployment checks and salaries
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