New York Times: Feds Suspect Vast Fraud Network Is Targeting U.S. Unemployment Systems
Investigators see evidence of a sophisticated international attack they said could siphon hundreds of millions of dollars that were intended for the unemployed
SEATTLE — A group of international fraudsters appears to have mounted an immense, sophisticated attack on U.S. unemployment systems, creating a network that has already siphoned millions of dollars in payments that were intended to avert an economic collapse, according to federal authorities.
The attackers have used detailed information about U.S. citizens, such as social security numbers that may have been obtained from cyber hacks of years past, to file claims on behalf of people who have not been laid off, officials said. The attack has exploited state unemployment systems at a time when they are straining to process a crush of claims from an employment crisis unmatched since the Great Depression.
With many states rushing to pay claims, payments have gone straight to direct-deposit accounts. In Washington State, the agency tasked with managing unemployment claims there began realizing the extent of the problem in recent days when still-employed people called to question why they had received confirmation paperwork in the mail.
“This is a gut punch,” said Suzi LeVine, the commissioner of Washington State’s Employment Security Department.
In a memo obtained by The New York Times, investigators from the U.S. Secret Service said they had information suggesting that the scheme was coming from a well-organized Nigerian fraud ring and could result in “potential losses in the hundreds of millions of dollars.” Roy Dotson, a special agent who specializes in financial fraud at the Secret Service, said in an interview investigators were still working to pinpoint who was involved and exactly where they were.
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