Nigerian scammers are transferring millions of dollars in unemployment money into a sophisticated scheme
A Nigerian fraud group has reportedly infiltrated US unemployment systems in an advanced attack that has already stolen millions of dollars in payments intended for unemployed Americans and to prevent an economic crisis.
The extensive and complicated network has stolen detailed citizen identities, such as social security numbers, to make false claims on behalf of employees who may not even have lost their jobs, The New York Times reported.
US Secret Service investigators said they have information that suggests there is a well-organized Nigerian fraud group behind the scheme, which authorities say could lead to “potential losses in the hundreds of millions of dollars.”
The agency believes Washington state is the prime target of the criminal business, but there are also indications of attacks in Florida, Massachusetts, North Carolina, Oklahoma, Rhode Island, and Wyoming.
The extensive and complicated network has stolen detailed citizen identities, such as social security numbers, to make false claims on behalf of employees who may not even have lost their jobs.
They also warned that each state was vulnerable and could easily be next, citing attackers’ apparent access to extensive personally identifiable information (PII).
Roy Dotson, a special agent with the secret service, told it The times that investigators were still trying to confirm the attackers’ identities and determine exactly where they operate.
“We actively walk back every lead we get,” said Dotson.
Investigators say the operation appears to be backed by a significant number of “mules” – people in the US who are used as money laundering intermediaries after contacting the fraudsters online.
The attack has abused state unemployment systems at a time when they are struggling with the overwhelming number of claims made during an unemployment crisis that has not been seen since the Great Depression.
Rhode Island police announced on Monday that it had received “numerous reports of suspected fraud” related to unemployment benefits.
Scott Jensen, the director of the Rhode Island Department of Labor and Training, noted that it is difficult to distinguish between a legitimate claim and a fraudulent claim when the fraudsters provide accurate and detailed information.
“Whoever it is, it seems fairly sophisticated and good at what they do,” Jensen said, adding that the state is coming under increasing pressure and a closer look at claims from specific banks and other trends.
The attack has abused state unemployment systems at a time when they are being squeezed by the overwhelming number of claims made during an unemployment crisis that has not been seen since the Great Depression
Meanwhile, Suzi LeVine, the Washington State Commissioner for Occupational Safety, declined to give Washington a specific figure for the state’s losses so far, but said she thought it would be in the millions of dollars.
Confused workers and entrepreneurs in Washington State have flooded the authorities with calls about reports of unemployment they have received despite never filing a claim.
Some workplaces have been particularly hard hit. Among them is Western Washington University, where more than 400 of its 2,500 employees have fallen victim to fraudulent claims.
Suzi LeVine described the current schedule as a ‘gut punch’.
Anna Zivarts, who works at Seattle-based non-profit Disability Rights Washington, said she also received a number of unemployment letters on May 8.
“I called my boss and said,” Am I going to be fired and just don’t know? “Zivarts said The timesbut her boss assured her that she was still employed.
Zivarts said she called and emailed the state to flag the issue. Her employer has also notified the state.
Some workplaces have been particularly hard hit. Among them is Western Washington University, where more than 400 of its 2,500 employees have fallen victim to fraudulent claims
Since the coronavirus pandemic began to devastate the United States, more than 36 million people have claimed unemployment in the past two months, with billions of dollars in benefits.
States rushing to receive payments to people out of work are probably the most susceptible to the scheme. Many states have long opted for lengthy review periods to help detect fraudulent claims, but as more people qualify and the need for payments becomes more urgent, some states have circumvented those safeguards.
In Washington, where a million people have lost their jobs since March, the state has shortened the typical one-week evaluation period to meet overwhelming demand.
“There is an urgent need to make money fast,” said LeVine. “This makes us an attractive target for fraudsters.”
American lawyer Brian T. Moran told it The times his Seattle office worked with other agencies to track and prosecute those who made false claims. But he also said that the state should “address and resolve vulnerabilities in their system.”
LeVine said the unemployment agency is monitoring trends and using them to help identify suspected cases before payments were made. The state has also introduced a two-day delay in payments to give employees more time to investigate the claims.