Anthony Kreashko lost his job as an electrician in 2020, so, like legions of Coloradans during the pandemic, he filed for state unemployment benefits.
The regular payments helped keep Kreashko afloat as he searched for a new gig. But four years later, the Denver resident received a surprising letter from the : State officials told him they had mistakenly overpaid him.
Now they wanted $1,800 back.
Kreashko, 43, said he would have fought the decision if he saw an avenue to appeal. After he filed his taxes last year, he realized the state took his refund as payment.
“One-hundred percent I would have appealed,” he said in an interview. “I don’t feel I owed them anything.”
Federal law mandates that states provide people the opportunity to appeal unemployment overpayment determinations. But internal emails reviewed by The Denver Post show leadership at the state’s has known for years that they’re supposed to be offering these appeals, but don’t.
Colorado overpaid people nearly $100 million in unemployment benefits last year alone, and federal data shows the state has been largely unsuccessful in recouping that money.
One manager, in a 2024 email, expressed concern that allowing people to fight overpayment decisions would hurt the department’s efforts to recover money from claimants. The division director, Phil Spesshardt, in another email that year, called the appeals a “waste of time, energy (and) resources.”
Multiple times, federal labor officials told their Colorado counterparts that the appeals are required, emails show. But state officials have been dragging their feet on implementing the measures.
“What the division is doing here is unconscionable,” one state unemployment hearing officer told superiors in a 2024 email.
Meanwhile, the state’s unemployment division has been roiled by internal and external investigations amid staff whistleblower complaints. One probe this year found Spesshardt and another manager created “an erosion of trust” as they sought an external review of the division to examine culture issues. State officials terminated that review after an internal investigation found Spesshardt failed to report a conflict of interest.
Another probe found Spesshardt “more likely than not” altered position descriptions for two employees without their consent.
Spesshardt acknowledged to The Post that “we should have focused on the overpayment and appeals process sooner.” In his 34 years with the state, the division has never allowed people to specifically appeal overpayment decisions because they’re already able to appeal the benefit decision that resulted in the overpayment.
In an “onerous and complicated program,” Spesshardt said, state officials didn’t want to make the process more confusing for claimants.
His team is working on implementing these appeals before the end of the year, he said.
‘It’s been making me sick’
Emails reviewed by The Post show employees, beginning in 2024, started to raise concerns that the division was not ensuring people had the right to appeal overpayment findings.
“Overpayments have always been appealable, for obvious reasons,” Cheyanne Kinghorn, an unemployment hearing officer with the division, wrote to management in October 2024. “…The division has known this is wrong… why would they so willfully disregard the law?”
All the money the division has collected on overpayments since it stopped doing appeals is probably owed back to the claimants, wrote Kinghorn, who did not specify when she believed the ability to appeal overpayment determinations ended.
“It’s been making me sick for over a year, so I truly hope the appropriate persons are held accountable,” she wrote.
Kinghorn, when contacted by The Post, declined an interview request.
A discussion ensued over email, with higher-ups expressing their reticence at changing the status quo. One problem, they said, would be that their metrics would suffer if they allowed appeals.
The U.S. Department of Labor sets “” for a variety of unemployment insurance measures.
One metric tracks the number of improper payments states handed out to claimants. On that front, Colorado is doing well: The state’s sits below the federal government’s acceptable threshold of 10%.
The feds also track the amount of money that state labor departments are able to recover from those overpayments. Anything above 68% is considered an acceptable level of performance.
Nationwide, labor departments recovered 62% of the $1.28 billion in unemployment overpayments in 2025.
But Colorado, during the same period, of the more than $63 million that the state issued in overpayments. That number doesn’t count the nearly $33 million in waivers that state officials last year granted to claimants who said they couldn’t afford to repay the money.
Jeff Newcomb, branch manager for Colorado’s unemployment insurance customer services, said in an October 2024 email that “we’re already seriously out of compliance with our federal recovery rate” and that offering overpayment appeals “will likewise reduce our ability to meet our collection goals.”
“Considering our challenges related to our recovery rate and our current law that makes pretty much any (overpayment) subject to a waiver approval, I think we’ll be circling the drain with our collection efforts moving forward if all overpayments are subject to appeal,” he wrote.
Spesshardt replied that overpayments are a binary issue: If you received benefits and were later deemed ineligible for them, you are overpaid.
“In short, allowing an appeal here just slows the process and is really a kangaroo court,” he wrote. “…Let’s not be creating unneeded bureaucratic steps in what it takes to resolve an overpayment by a claimant.”
Darin Mullen, the branch manager for unemployment insurance appeals, acknowledged in another email that “most seem to feel that permitting these appeals is just unnecessary and a waste of time.”
Claimants can already appeal the benefit decision that caused the overpayment, Mullen said. But he admitted that those decisions “do not provide adequate notice that an overpayment has occurred and what the amount of overpayment is.”
State officials sought guidance from the feds, who told them that the law is clear: States must provide appeal rights to overpayment determinations.
“How each state dockets these cases at the appeal level varies, but in each, the claimant is provided an opportunity to discuss the matter before a hearing officer at some point,” Stephanie Jackson, a federal labor official, told the department in a September 2024 email.
Despite the guidance, nothing changed.
Spesshardt, in his interview with The Post, said hitting metrics should be secondary to the division complying with federal guidance, as well as ensuring claimants understand the unemployment process. As to why it’s taken multiple years to implement this new system, the director said it takes time to shift decades of behavior.
After employees again raised the issue earlier this year, Mullen said the division agreed with the federal officials that overpayments should be appealable. A ticket has been entered into the system to include appeal information, he said in a February email to a staff member.
Two months later, Mullen said in another email, “It will likely be quite some time before that ticket is complete,” as there are other projects in front of it.
Unemployment insurance experts consulted by The Post said Colorado’s notifications — or lack thereof — for overpayments are unusual and could be confusing for claimants.
“A lot of states will send you an overpayment notice and say you have the right to appeal; it’s really clear,” said Rebecca Dixon, president and chief executive officer at the . “What Colorado is doing is trickier. If you miss your window to appeal that benefit determination, that was your window. If you don’t know that, you’re in trouble.”
In the meantime, Coloradans continue to pay back money to the state with no idea that they can appeal.
Scott Gilmore was one of the nearly 200 Denver city workers laid off during last year’s budget cuts. The deputy executive director for parks and recreation received unemployment benefits from the state, then got a letter last month saying he needed to pay back $533 to which he wasn’t entitled.
“It’s pretty frustrating,” Gilmore said. “At a time when you’re struggling to make ends meet, you’re depending on these very limited funds to balance your budget and pay your bills. To get this letter saying you owe this money immediately is very concerning.”
He scanned the notice.
“I don’t see anywhere where it says you can appeal this decision,” he said.
Indeed, Colorado’s “notice of overpayment benefits” does not include any appellate information. It does include information about how to pay, how to set up a payment plan if you can’t pay the full amount and how to request a waiver of your overpayment. The notice says you can call the division if you have questions about your overpayment or if you feel the amount is incorrect.
But several people told The Post that they just paid the money back — even if they disagreed. They worried about being sent to collections or having the debt impact their credit scores.
“With the waiver, there was no criteria of what would be approved and not approved,” said Emily Roozen, who the state says owed more than $9,000 in overpayments. “I was just burnt out on (the process) and didn’t know what to do.”
Spesshardt, in a statement to The Post, said his office is “committed to making every step in the claimant experience more clear by using plain language in every claimant-facing experience we deliver.” The team has recently reviewed and revised nearly 500 pieces of correspondence and online portal screens for plain language, he said.
“We understand our claimants are going through stressful periods of joblessness and (we) will continue to uphold our commitment to improving the unemployment lifecycle wherever possible.”
Investigations, reviews and outside probes
In the midst of the overpayment debate, the unemployment insurance division devolved into a series of investigations, reviews of those investigations and spiraling distrust between staff and superiors, labor department documents obtained by The Post show.
In 2024 and 2025, four hearing officers in the appeals unit filed complaints against the department, leading to three internal investigations by human resources, according to a separate, outside probe conducted by , a firm specializing in workplace reviews.
Two of those complaints, in October 2025, alleged that someone had altered a position description document that outlined whether they would be remote, hybrid or in-office workers. Both selected “remote.” But these employees later learned that their forms had been switched to hybrid without their consent.
An internal investigation, obtained by The Post, found Spesshardt “more likely than not” altered these documents after the individuals had already signed them. Spesshardt admitted to The Post that he changed these forms to reflect that nearly all employees in the division are hybrid workers. He acknowledged that the “process was sloppy,” but said nobody’s job actually changed.
Just days after the workers lodged these complaints, Spesshardt convened a meeting. He told his employees that he would bring in an outside firm to conduct a “thorough workplace investigation” into the hearing officer unit and supervisors within that unit, state documents show.
The director’s comments led to even more complaints. Spesshardt, employees said, “sought to threaten, or retaliate against, them for having submitted complaints to HR.” In response, the state decided to hire outside investigators to review some of these complaints.
Investigators found it was “less likely than so” that the director threatened the employees that day. Still, the report’s authors noted an “obvious lack of trust” between multiple employees and leadership. In the case of Kinghorn, one of the complainants, “a repair of that relationship seems unlikely.”
Spesshardt’s investigation, announced at the October meeting, was necessary due to “an erosion of trust that is leading to conflict within the unit,” state officials said in correspondence with the outside firm, . The request asked for GPS to assess the “root causes of the trust erosion and work with staff and leaders to chart a fresh course forward.” The probe cost the state $65,550.
The hearing officers who had filed the whistleblower complaints grew outraged.
“Why would the state approve over $50k in public funds for two subjects of an investigation to launch a counter-investigation into their accusers?” Kinghorn wrote in a March email. “Isn’t CDLE worried that doing so could appear to constitute using public funds to carry out retaliation?”
The state initiated yet another investigation of an investigation.
A procurement official from the state labor department in March found Spesshardt appeared to have a “perceived conflict of interest” in the outcome of the GPS probe. The official noted that the unit being subjected to the external review had open whistleblower complaints against the director and others on the unemployment insurance appeals team.
On March 24, the state and GPS mutually terminated the agreement.
The procurement department, in another ruling in April, found Spesshardt provided information to GPS and other division supervisors that could prejudice the outside investigators during their work.
The activities of the director and another manager “created an erosion of the trust necessary for the successful completion of the project,” the report stated.
“I find that unethical conduct likely occurred,” the author concluded.
The Department of Labor and Employment’s financial monitoring unit issued Spesshardt an internal infraction for his role in the GPS contract fiasco.
Spesshardt told The Post that it was “insulting to say I had a conflict of interest” and denied engaging in unethical behavior. He acknowledged he shouldn’t have called the GPS probe an “investigation” when speaking to his team, but pointed to the outside review’s conclusion that he wasn’t trying to retaliate against anyone.
“Everything was designed to improve the culture,” he said.
Unfortunately, Spesshardt said, the vibes have not improved.
“Is it there yet? Would I say it’s getting better in that unit?” he said. “No.”
