COLUMBUS, Ohio — A plan to overhaul the state's antiquated unemployment system is on hold after two senior partners from the company Ohio hired to upgrade the system were indicted on criminal charges.
Federal investigators allege the Sagitec Solutions executives stole trade secrets from Deloitte, their former employer.
Court records show Sagitec senior partners David Gerald Minkkinen and Sivaraman Sambasivam were indicted in the U.S. District Court for the Southern District of West Virginia in August.
The Minnesota-based company was awarded an $81 million contract to update Ohio's unemployment system, which consists of two components, according to Bill Teets, ODJFS spokesperson.
In an email, he wrote, "We’re aware of the allegations and have put our project on hold while we consider the implications to our unemployment insurance modernization
project. "
So far, the state has spent $15 million to complete the first phase of the project, wrote Teets.
In another email, he wrote, "The first is the unemployment tax system used to collect employer taxes for the purpose of funding unemployment benefits. This system went live in late 2021."
The second portion is our unemployment benefits system, which is used to manage unemployment claims. The timing on that portion was originally thought to be 2022, but, prior to the pause, was pushed back to fall of 2023. "
READ MORE: Thousands of Ohioans waiting for answers on unemployment overpayment waivers
During the pandemic, News 5 Investigators revealed how the outdated system was easy prey for cybercriminals and left workers waiting for help.
READ MORE: How cybercriminals spent billions of dollars meant for unemployed Americans
OH Gov. Mike DeWine, Lt. Gov. John Husted, and ODJFS declined our on-camera interview requests.
