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New York DMV Restarted Online Permitting Despite Fraud

Employees reported evidence of cheating and widespread use of counterfeit ID documents with the online testing system, but the DMV platform was restarted in February, months before security issues were fixed.

(TNS) — An online testing system that's led to rampant fraud in New York's driver permit program was restarted in February despite warnings from county clerks and motor vehicle workers that they were seeing evidence of cheating as well as the widespread use of counterfeit identification documents.

Sources familiar with the matter said the online permit system, which was launched last year in order to keep New York's licensing system running during the coronavirus pandemic, was restarted, in part, on the advice of Boston Consulting Group, a firm that was hired by the administration of former Gov. Andrew M. Cuomo to assist the state during the pandemic.

Assemblywoman Daphne Jordan, R- Halfmoon, and Saratoga County Clerk Craig Hayner, both of whom had publicly warned about the potential for fraud tied to the Department of Motor Vehicles' identification verification processes, recently called for an audit of all online permit tests since August 2020, when a pilot program was launched.

"In fall of 2020 DMV piloted an online permit test capability by invitation only for a limited time period that closed in November 2020," said Darren Boyson, a spokesman for the agency. "DMV used the results of that pilot to develop an enhanced online capability that was released publicly in February 2021. ( Boston Consulting Group), among other vendors, assisted in the design of that application."

The firm, which previously employed one of Cuomo's daughters, Mariah Kennedy Cuomo, had been retained to help multiple state agencies with pandemic-related work, including the vaccination rollout.

At the DMV, Boston Consulting Group provides "consulting and design services related to modernizing and restructuring DMV processes to adapt to the digital era and the realities of serving customers during the pandemic."

A person briefed on the matter said the online system was restarted in February without the security enhancements; those fixes weren't added until the end of October.

"Staff were told that BCG had made the call because the state was losing money," the person said. "With the state offices set up for appointment only, customers were going to county clerk offices for permits and permit tests. When the transactions are processed at a county clerk office, the clerks keep over 10 percent of the transaction fees."

The DMV declined to specify how much Boston Consulting Group is being paid by the state for its work with the agency, but the person briefed on the matter said staff have been told the sum is around $200,000 per day. The firm's contract with the state, which began in September 2019 and extends through August 2024, is for $134 million. New York is thus far obligated to pay Boston Consulting nearly $50 million, according to state records.

The Times Union reported Nov. 16 that the state inspector general's office is investigating schemes to illicitly obtain driving credentials for undocumented immigrants, who may have used the licenses to establish residency and receive unemployment benefits under the state's newly established Excluded Worker Fund, which lawmakers had complained was quickly drained and left thousands of people without pandemic-related unemployment benefits.

Some DMV workers had said the alleged cheating was exacerbated by the state's Green Light Law, which went into effect in December 2019 and has allowed thousands of undocumented immigrants to obtain driver's licenses — something that more than a dozen other states also allow.

"We need to fix the Green Light Law's many deficiencies by enacting my legislation to provide a driving privilege license that can't be used for identification to help reduce ID fraud," Jordan said. "We also need a comprehensive audit of the state's driver's permit program to ensure that all of the ongoing fraud and corruption — which are potentially spilling into the $2.1 billion Excluded Workers Fund — are rooted out and ended to help protect taxpayer dollars from waste, fraud, and abuse."

Workers for the state DMV last month said the agency had stepped up efforts to prevent widespread cheating in the online driver's permit program, including blocking individuals outside of New York from taking the online tests.

In August, the department issued an internal memo warning its Division of Field Investigation "has reported an increase in altered and counterfeit foreign passports being submitted," and that foreign passports should be authenticated using electronic scanning devices that have been issued to motor vehicle offices. In another memo, the department cautioned that investigators had detected counterfeit Ontario driver's licenses being used to obtain reciprocity licenses from New York.

The Times Union previously reported that many of the individuals suspected of exploiting the program to obtain pandemic-related state unemployment benefits may reside in other states or outside the country.

Spokesmen for the agency, citing security concerns, declined to detail how their agency recently began blocking individuals from taking the online tests from outside of New York, including in other countries.

"To ensure the continued safety and integrity of the system, and to help prevent future fraudulent activity, we cannot provide these specifics on the security measures," Boysen said.

Investigators with the inspector general's office told motor vehicle workers in Albany in October that they suspected undocumented immigrants had been paying $3,000 or more to have someone take the online driver's permit tests for them, and were also using fraudulent residency documents and fake mailing addresses. Clerks had reported seeing online ads posted by individuals or organizations offering to help applicants complete the online tests.

The law creating the Excluded Workers Fund was passed by the state Legislature in April, the result of an effort started last year to provide unemployment benefits for undocumented workers and others who did not previously qualify for state or federal pandemic unemployment benefits.

After the program launched on Aug. 1 — with applications in 13 different languages — Gov. Kathy Hochul said that the state Department of Labor had received more than 90,000 applications the first month, and approved more than half of those by Sept. 3. Nearly 100,000 applicants were expected to receive payments of $15,600, while another 200,000 or so were supposed to receive payments of $3,200.

In early September, Hochul announced the state Department of Labor had approved the distribution of more than $850 million from the $2.1 billion fund. At that time, $250 million had been released and an additional $600 million was going to be distributed pending verification of those applications, the governor said.

In early October, advocates complained that too many New Yorkers were being frozen out of the program, and asked for it to be expanded. That same month, the labor department posted a notice on its website that the fund that had benefited "thousands of New Yorkers statewide" was "nearing exhaustion," and that no applications would be accepted after Oct. 8.

The Department of Labor has declined to respond to questions about whether it is involved in the investigation of the fraud tied to the Excluded Workers Fund and, if so, how much fraudulent activity has been uncovered.

In an effort to stem the cheating, DMV added a security feature to the tests in late October that required the person taking the online test to be photographed four times during the exam. That enabled clerks to compare the images of the person who took the online test to the person standing before them.


(c)2021 the Times Union (Albany, N.Y.) Distributed by Tribune Content Agency, LLC.
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