When over 40 million Americans applied for unemployment benefits, the chaos in the system was an excellent cover for fraudsters.
This is reported by The New York Times.
“It’s the perfect storm of identity fraud. Anyone who has experienced a serious violation in the past three or four years can become a victim of this”, – said Pam Dixon, executive director of the World Privacy Forum research group.
The scheme of fraudsters is very simple.
They just apply for benefits on behalf of other citizens. When these people apply to the Employment Service themselves, they find out that the allowance has already been paid to them. The States have tried to combat fraud by noting potentially suspicious claims, but this has made it more difficult to operate an already overburdened system.
Scott Dahl, who recently resigned as Inspector General of the U.S. Department of Labor, testified to Congress that counterfeit applications could cost the state up to $26 billion.
Presumably the state of Washington suffered the most. Here, the criminals managed to get up to $650 million as benefits for fake applications. Some of this money has been recovered through the work of federal security agencies, but $300 million is still in the hands of fraudsters. And that’s in one state only.