Marialda Romei: Fraudulent unemployment claims alarming people across the US

Blog Post #1

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Marialda Romei

           The Covid-19 pandemic has effected almost every aspect of society today. One specific aspect that’s been distinctly afflicted in the United states alone, is unemployment-benefit fraud. According to The Wall Street Journal, this issue “could amount to billions of lost dollars, reflecting the vulnerabilities that workers and governments face in the midst of historically high levels of jobless claims related to the coronavirus pandemic” (Chaney, 2020.). Billions of lost dollars will affect the economy tremendously in the long run. Unemployment fraud can be processed in different ways, one form is identity theft or a claims recipient which is “knowingly submitting false information” or “knowingly continuing to collect benefits when ineligible” according to the Labor Department. Why are people continuing to collect unemployment when knowing they’re legally ineligible? Some reasons could be: people are fearful of what is to come economically for themselves during the pandemic, or it could be that people are taking advantage of the system and collecting to benefit themselves, while irritating the national economy. Some have higher numbers of fraudulent unemployment- according to The Wall Street Journal which quotes from the United States Secret Service, “The U.S. Secret Service issued a memo last month saying a Nigerian fraud ring was targeting state unemployment systems. The Secret Service highlighted Washington as the hardest-hit state but said there was evidence attacks had occurred in North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida” (Chaney, 2020.).

            The FBI detected a spike in fraudulent unemployment insurance claims related to stolen use of identities during the Covid-19 pandemic. According to the FBI, “U.S. citizens from several states have been victimized by criminal actors impersonating the victims and using the victims’ stolen identities to submit fraudulent unemployment insurance claims online. The criminals obtain the stolen identity using a variety of techniques, including the online purchase of stolen PII, previous data breaches, computer intrusions, cold-calling victims while using impersonation scams, email phishing schemes, physical theft of data from individuals or third parties, and from public websites and social media accounts, among other methods. Criminal actors will use third parties or persuade individuals who are victims of other scams or frauds to transfer fraudulent funds to accounts controlled by criminals” (FBI sees spike in fraudulent unemployment, 2020.).

As stated in The New York Times which was quoted from the Unemployment Security Department, “Washington may have been the hardest-hit state: Criminals collected as much as $650 million in benefits, although the state has already recouped about $350 million with the help of federal law enforcement, according to a spokesman for the state’s Employment Security Department” (Bernard, 2020). In one state alone, more than half of one billion dollars was illegally collected.

Clearly, fraudulent unemployment claims during Covid-19 has been flagged as a severe issue, but with time comes healing, and with the help of federal law enforcement, the economy could be relieved of even more severe economic issues in the long run.

Works cited:

“Unemployment Benefits Fraud.” ESDWAGOV – Unemployment Benefits Fraud, esd.wa.gov/unemployment/unemployment-benefits-fraud

Bernard, Tara Siegel. “Fraudulent Jobless Claims Slow Relief to the Truly Desperate.” The New York Times, The New York Times, 2 July 2020, www.nytimes.com/2020/07/02/your-money/coronavirus-unemployment-fraud.html

“FBI Sees Spike in Fraudulent Unemployment Insurance Claims Filed Using Stolen Identities.” FBI, FBI, 6 July 2020, www.fbi.gov/news/pressrel/press-releases/fbi-sees-spike-in-fraudulent-unemployment-insurance-claims-filed-using-stolen-identities

Chaney, Sarah. “Unemployment Fraud Spreads Across U.S. as Coronavirus Boosts Claims.” The Wall Street Journal, Dow Jones & Company, 3 June 2020, www.wsj.com/articles/unemployment-fraud-spreads-across-u-s-as-coronavirus-boosts-claims-11591189201?mod=searchresults&page=1&pos=3

“Nigerian National Brought to U.S. to Face Charges of Conspiring to Launder Hundreds of Millions of Dollars from Cybercrime Schemes.” Secret Service.gov, 3 July 2020, www.secretservice.gov/data/press/releases/2020/20-JUL/BEC-scam-Hushpuppi-arrest.pdf