They were wiring large amounts of money to people in Oklahoma rather than their own state. That there is no effort put into preventing fraud, which was guaranteed to happen, is down to negligence of the state government. Part of that is on the voters who allocate tax dollars in an idiotic fashion whenever given the chance.
There are plenty of cases where someone would be paid unemployment insurance out of state. The most common one is moving back to be closer to a family support network after losing a job since many people don't have much in the way of savings, at least not enough for a few months rent while they look for work. In most states, unemployment insurance is paid for by employers per worker and after paying in for a certain time, the UI program essentially owes the unemployment benefits to the worker once they lose their job. Where that worker chooses to go with their checks is up to them.
