The D.C. government has accused 90 of its employees of pilfering from the city's unemployment-insurance system as part of a three-year habit of deliberate fraud totaling $840,000.
Mayor Vincent C. Gray announced Monday that an investigation spearheaded by the Department of Employment Services identified at least 130 current and former city employees who are suspected of obtaining unlawful payouts since 2009 and could face criminal prosecution.
Many of the accused employees were notified on Monday and placed on administrative leave with pay. Each almost certainly will be terminated if there is sufficient evidence of fraud, officials said.
DOES Director Lisa Mallory said Monday that her agency uncovered the cases after a cash injection into their overpayment-detection systems from the federal government. The agency found a number of D.C. employees among those who had received illegitimate unemployment benefits.
"Were we surprised? Yes we were," Ms. Mallory said.
Ms. Mallory said there is no evidence of collusion among the suspected employees, who should have known they were obtaining checks unlawfully.
"It's their responsibility every week to certify they don't have any other income," Ms. Mallory said. "I just think it's gross misconduct."
Employees caught up in the probe work for about 20 agencies across the city, including D.C. Public Schools, the Office of the State Superintendent for Education, the District Department of Transportation and a staff member of the D.C. Council, according to Ms. Mallory.
A spokeswoman for council Chairman Kwame R. Brown said the council staffer worked for former council member Harry Thomas Jr. before joining the chairman's staff when Thomas resigned in disgrace for theft and tax fraud. The staff member, who was not identified, has been placed on leave, the spokeswoman said.
One of the accused employees worked for DOES, agency officials said.
Each of the people suspected of fraud received checks of $50 to $359 per week, depending on their prior contributions and position before they became unemployed, officials said. The fraud did not skew the District's unemployment rate — which stands at 10.4 percent as of December but reaches more than 20 percent in parts of the city — because it is tabulated with sampling instruments that do not include payouts, Ms. Mallory said.
Ms. Mallory said her agency reported about 60 of the cases to the D.C. Office of the Inspector General late last year and plans to send more cases by Tuesday.
She also has alerted the city's attorney general, the U.S. Attorney's Office and the U.S. Department of Labor of the agency's findings. Her efforts "send a strong and clear message that we will not tolerate fraud in this government, but will root it out and hold people accountable," Mr. Gray said.
Federal prosecutors will handle cases of criminal wrongdoing, and D.C. Attorney General Irvin B. Nathan may launch civil actions to reclaim any money that was disbursed through improper means, city officials said.
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