Published: September 1, 2020 on our newsletter Security Fraud News & Alerts Newsletter.
There was a recent Secret Service memo sent to field offices across the country, telling its members that the current pandemic has led to a historic spate of fraudulent unemployment claims. The alert claims a Nigerian hacking group is using hundreds of “mule” helpers to generate the claims for the financial benefit of the group. The Secret Service says a Nigerian crime ring is operating the same way as others who file fraudulent income tax refund requests during tax season. They believe those with compromised Social Security numbers and other PII (personally identifiable information) used for the unemployment fraud are likely already victims of identity theft.
Perhaps even more criminal in nature, the alert finds “a substantial amount of the fraudulent benefits submitted have used PII from first responders, government personnel and school employees.” All told, the final cost for the unemployment scam could be a multitude of billions of dollars.
According to the Secret Service alert, the unemployment fraud starts with identities stolen from financial institutions and the targeted banks ranged from local to national. At the time, the memo claims the primary state targeted was Washington. It’s been reported that the state saw a flood of unemployment claims, with many of them in the $9,000 to $20,000 payment range. The Seattle state Employment Security Department revealed that “Between March and April, the number of fraudulent claims for unemployment benefits jumped 27-fold.” The alert also finds evidence of attacks in six other states: North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming, and Florida.
The Secret Service concludes this massive criminal scam is likely to affect even more states, particularly those not making additional efforts to root-out fraudulent claims. Some experts feel the reason there’s little improvement ferreting-out fraudsters is that in addition to the historic surge in claims, many states don’t have enough technology in place to detect the fraudulent filings. In their own words, the Secret Service alert concludes “It is extremely likely every state is vulnerable to this scheme and will be targeted if they have not been already.”
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