NEW YORK (CBSNewYork) — Thousands within the New York unemployment system have become victims of fraud during the pandemic, and now there’s an audit to find out who dropped the ball.

First, he lost his job as a temp at a law firm. Then without warning, Joe Pennacchio was frozen out of his weekly unemployment benefits.

READ MORE: Conservation Work Done On Gay Liberation Monument In Christopher Park

“I need it desperately,” he told CBS2’s Jessica Layton.

New York state told him he was a victim of fraud.

“Your account and over a thousand other accounts statewide were scammed and broken into, and that money was taken,” he said.

It’s been two months without any cash or many answers at all.

Whenever he tries to call, he hears a recorded message saying, “We’re sorry, we’re experiencing an extremely high volume of calls at this time.”

“And that’s all day, every day?” Layton asked.

“All day every day,” Pennacchio said.

Damen Seminero was never on unemployment, but he got a letter alerting him that someone had filed a claim in his name.

READ MORE: New York's COVID State Of Emergency Set To Expire Thursday

“You know I was petrified that … The fact that it’s fraud,” he said. “The fact that someone can go ahead and open a claim speaks volumes to the process in place and the security … and a lot of room for improvement.”

Rip-offs of all kinds are on the rise in New York. In 2020, complaints to the Federal Trade Commission surged 85%.

“A significant part of that had to do with unemployment benefits,” New York State Comptroller Tom DiNapoli said. “Those who were trying to scam the system were figuring out new ways to take advantage of the pandemic environment.”

Just this week, eight people in Brooklyn were arrested after allegedly stealing $2 million by submitting false claims. Prosecutors say they even have surveillance images of them making cash withdraws from ATMs.

CORONAVIRUS PANDEMIC

The state insists this didn’t happen because of a breach to its own department of labor systems.

DiNapoli has opened an audit of the Department of Labor’s practices to see what went wrong.

“The kind of red flags that should have been in place weren’t in place at that time. The system was overwhelmed,” he said.

He says if you think you’re a victim, alert the credit reporting agencies so you don’t further pay for someone else’s crime.

MORE NEWS: 'Diaphragm Law' Banning NYPD Officers From Applying Pressure To Suspect's Torso Struck Down

CBS2’s Jessica Layton contributed to this report.

CBSNewYork Team