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A Labor Department employee is the latest federal worker to be accused of claiming unemployment benefits while holding down a full-time job with Uncle Sam, highlighting what one leading senator said has become a persistent problem of double-dipping.
Mo Yuong Kang, who worked as an industrial hygienist for the Occupational Safety and Health Administration in 2020 and 2021, getting paid a $90,000-a-year salary even as millions of other Americans were being laid off amid the coronavirus pandemic.
But federal prosecutors said he wasn’t content with that, and also applied for — and received — pandemic unemployment benefits from April 2020 through September 2021. He collected nearly $46,000 in extra cash, according to the federal indictment.
Sen. Joni Ernst, Iowa Republican, said there may be thousands more like him who held down government jobs but collected unemployment on the side.
She asked the Labor Department inspector general — which helped investigate Mr. Kang — to look over the government’s lists of employees and lists of unemployment beneficiaries and see where they overlap.
“Hundreds, even thousands, of government employees appear to have been ripping off the unemployment system by claiming to be unemployed,” she said.
She said the problem extends beyond federal workers.
In Ohio, an inspector general this week reported on a contract employee at the state’s unemployment benefits agency who was found to be collecting benefits for eight months even while she held her government job.
The inspector general said Sandra Schnieders, a customer service assistant, also manipulated eight claims that led to higher payouts for friends and associates. In one of those cases, she boosted the weekly payout from $189 to the maximum of $480. In another case, she approved a file that had been halted, leading to $21,323 in bogus payouts.
All told, investigators said, she was responsible for $112,240 in fraudulent payments, nearly $19,000 of which went straight to her own pocket.
The pandemic produced a tsunami of fraud, with some estimates figuring as much as 40% to 50% of the $800 billion in extra federal unemployment assistance was paid in bogus claims.
Under the direction of Congress, which chose to push the money out quickly and worry about fraud later, state workforce agencies that administered the program dropped eligibility checks and allowed Americans to self-certify that they were out of work.
That made it easy for people who actually did hold jobs to claim benefits anyway.
Chasing them down after the fact has proved difficult, but Ms. Ernst said there’s no excuse in the case of federal workers, for whom the government has lists of who was working and when.
“It’s time to root out the rip-off artists and put an end to the inside jobs by making it impossible to collect employment and unemployment benefits from the government at the same time,” she said. “Since both lists are maintained by the government, this should be a rather easy fix.”
She said fear of being exposed might be an explanation for why some federal workers have objected to the Department of Government Efficiency gaining access to agencies’ files.
“The deep state doesn’t want those meddling whiz kids at DOGE exposing the Washington corruption that’s been hiding in plain sight for way too long,” said the senator, who is chair of the Senate DOGE Caucus.
Mr. Kang left OSHA in 2023.
He was charged Tuesday in federal court in Massachusetts. Court records did not list a lawyer for him as of Thursday.
Ms. Ernst said there’s something particularly galling about fraud done by federal workers, which she likened to an “inside job.”
The perpetrators span the government.
Prosecutors in Texas won a 24-month sentence earlier this year against a Social Security employee who stole identities — including that of a dying man — then created fraudulent applications in their names, collecting both Social Security and pandemic stimulus payments.
A Small Business Administration employee used her access to the agency’s systems to approve a bogus $170,000 pandemic loan for herself — after it had been denied by another loan officer. She also approved loans for her relatives.
Ms. Ernst identified other cases involving the IRS, Amtrak and the U.S. Postal Service, where a married couple was charged with collecting unemployment benefits while on the job — and with stealing pandemic stimulus checks from postal customers.
The problem extends to the states, too.
In Michigan, a claims examiner at the state’s unemployment benefits office earned a 41-month prison sentence for taking bribes to process at least 40 fraudulent claims for people who were behind bars, and thus ineligible.
Authorities said the state paid out more than $1.5 million because of her bogus approvals.
In Louisiana, a state unemployment agency employee used her access to the system to troll for inactive accounts, reactivate them and route pandemic payments to herself.
After she was fired in March 2021, she applied for her own unemployment, claiming to be a victim of the pandemic when in fact she was fired for cause for her “misconduct,” prosecutors said.
She walked away with more than $200,000 in ill-gotten cash — and, as of June, a felony conviction.
In at least some of the double-dipper cases, Ms. Ernst said, the workers are likely victims, with their identities having been stolen and bogus applications filed in their names.
She said the audit would uncover those cases, too.
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