State Unemployment Fraud and it’s Consequential Effects

A week ago, the U.S. Secret Service warned of large-scale unemployment fraud, stating that false filings coming from a Nigerian crime ring could cost the US federal government hundreds of millions of dollars in losses.

Several online crime forums and chat channels have been talking about financial fraud and are filled with posts from people selling tutorials on how to get unemployment money from different states.

For around $50 worth of bitcoin, you can learn how to ride the unemployment fraud “wave”. The chat channels talk about selling different “methods” for frauding unemployment in the states, and even provide instructions to avoid getting your fake request flagged as suspicious.

It seems like with the rate at which people in these channels are bragging about their fraudulent earnings with screenshots of their recent unemployment payment deposits being made daily, it looks like some states aren’t doing a whole lot of fraud-flagging.

A federal fraud investigator explained that many states have little controls in place to spot patterns in fraudulent filings, for example filings made for different people but from the same Internet address or multiple payments going to the same bank accounts.

Unfortunately many of the deposits are going into accounts where the unemployment filer’s name does not match the name on the bank account. Even worse, the source said, many states have drastically pulled back the amount of information needed to successfully request an unemployment filing.

The email security firm Agari found a fraud operation working with an experienced Nigerian cybercrime group called “Scattered Canary,” which has been busy frauding states and the federal government out of economic stimulus and unemployment payments. Agari stated that the group has been filing hundreds of successful claims and all using the same email address.

When the IRS released the website to distribute CARES Act payments last month, KrebsOnSecurity warned about the high possibility of it being abused by fraudsters trying to intercept stimulus payments from U.S. citizens. Which could easily be done due to the only information needed to submit a claim was name, date of birth, address and Social Security number.

Agari noted that since April 29, Scattered Canary has used the state of Washington to file at least 174 fraudulent claims of unemployment.

Unfortunately a number of states have had security problems with the PUA websites that have exposed personal details of citizens who filed for unemployment insurance claims. In Arkansas, some sites have released the SSNs, bank account and routing numbers for around 30,000 applicants.

With many losing their jobs due to the pandemic, unemployment is on the rise and unfortunately so is unemployment fraud.

Author Bio:- Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated chargeback insurance providers in the country that provides the safest and cheapest high risk merchant accounts in the space. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.


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