Foreign perpetrators among fraudsters shamming state’s unemployment systems

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State governments plan to update their security systems as they prepare for a new round of enhanced unemployment payments in an attempt to barr fraudsters from around the world believed to have already obtained billions of dollars from pandemic jobless aid.

The Associated Press reports that the fraud involves delaying unemployment payments and stealing thousands of Americans’ identities. According to a review by the AP, many states have not been prepared to protect their systems.

The onslaught of scams is fueled by previous identity thefts from banks, credit rating agencies, health care systems and retailers, according to the AP. Fraudsters from countries like China, Nigeria and Russia buy stolen personal information online and then use it to make bogus claims on state unemployment systems.

The people whose information is being used to file these fraudulent unemployment claims are not aware that their data has been used until their tax statements arrive.

More than $63 billion has been improperly given out due to fraud or errors according to the the Labor Department inspector general’s office. That amounts for about 10 percent of the total unemployment payments given through pandemic programs, the AP reports.

“We’re all learning that there is an epidemic of fraud,” said Rep. Kevin Brady (R-Texas), the ranking member of the House Ways and Means Committee, which oversees taxes. The congressman said that the estimated amount that has been stolen is “larger than the entire budget of the Department of Homeland Security.”

According to the AP, California has been targeted the most, losing an estimated $11 billion due to fraudulent claims.

In the U.S., the Department of Justice (DOJ) has arrested multiple people who reaped millions of dollars by filing fraudulent Payment Protection Program (PPP) claims. One Nevada man arrested in January allegedly defrauded banks out almost $2 million through the PPP, using the money to buy luxury cars and condos.

The widespread fraud has become so endemic that the DOJ has allotted money to hire more prosecutors, the AP reports.

The House passed a sweeping $1.9 trillion COVID-19 relief bill late last week. The bill will now go to the Senate where amendments are expected to be made before it is sent back to the House.

The bill includes another round of stimulus payments as well as a $400 unemployment insurance boost. Unemployment insurance benefits are currently set to expire in March.

Tags Associated Press Fraud Identity theft Insurance fraud Kevin Brady Unemployment benefits Welfare fraud

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