Criminals stole half of Covid Unemployment Benefits

Criminals may have stolen as much as half of the unemployment benefits the U.S., Axios News reports.

Unemployment fraud during the pandemic could easily reach $400 billion, most of it ending up in foreign crime syndicates.

States were not prepared for the  wave of unemployment claims, and knew fraud was inevitable, but decided getting the money out to people who desperately needed it was more important than laboriously making sure all of them were genuine.

Blake Hall, CEO of ID.me, a service that tries to prevent this kind of fraud, tells Axios that America has lost more than $400 billion to fraudulent claims. As much as 50% of all unemployment monies might have been stolen, he says.

Haywood Talcove, the CEO of LexisNexis Risk Solutions, estimates that at least 70% of the money stolen by impostors ultimately left the country, much of it ending up in the hands of criminal syndicates in China, Nigeria, Russia and elsewhere.

“These groups are definitely backed by the state,” Talcove tells Axios.

Much of the rest of the money was stolen by street gangs domestically, who have made up a greater share of the fraudsters in recent months.

After unemployment insurance became the primary vehicle by which the U.S. government tried to keep the economy afloat, however, all that changed. Unemployment became where the big money was — and was also being run by bureaucrats who weren’t as quick to crack down on criminals as private companies normally are.

Unemployment fraud is now offered on the dark web on a software-as-a-service basis, much like ransomware. States without fraud-detection services are naturally targeted the most.

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Wayne Creed

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