Michigan UIA faces scrutiny over fraud during COVID under Steve Gray's leadership

The Oversight Subcommittee on State and Local Public Assistance Programs convened on May 22, 2025, to address critical issues surrounding the Unemployment Insurance Agency (UIA) in Michigan, particularly focusing on the management of fraud during the COVID-19 pandemic.

The meeting began with a discussion led by a committee member who questioned the actions of former UIA Director Steve Gray, who served from June 2019 to November 2020. The member highlighted concerns regarding Gray's decision to deactivate the agency's fraud management system during a time of unprecedented claims due to the pandemic. The testimony indicated that the agency faced a dilemma between processing claims quickly and maintaining integrity against fraud.

The committee member pressed for clarity on whether the prioritization of timely payments compromised the agency's ability to prevent fraud. The response indicated uncertainty about Gray's specific motivations, emphasizing that decisions were made under pressure to manage the high volume of claims.

Further scrutiny was directed at the agency's handling of fraud cases, with references to 35 employees who were terminated or resigned amid allegations of criminal activity related to fraud. The discussion underscored the widespread nature of the fraud, which was reportedly orchestrated by organized crime groups targeting the UIA.

The committee member expressed strong disappointment in the leadership of the UIA, suggesting that the agency's decisions created an environment conducive to fraud. The metaphor of leaving "brownies on top of a table" was used to illustrate the perceived negligence in safeguarding against fraudulent activities.

The meeting concluded with a call for accountability and a commitment to improving the UIA's operations. The subcommittee's discussions highlighted the ongoing challenges faced by the agency and the need for reforms to prevent future fraud incidents.