Half of the pandemic's unemployment money may have been stolen
Source: Axios
Criminals may have stolen as much as half of the unemployment benefits the U.S. has been pumping out over the past year, some experts say...
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By the numbers: 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...
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"President Biden has been clear that this type of activity from criminal syndicates is despicable and unacceptable. It is why we passed $2 billion for UI modernizations in the American Rescue Plan, instituted a Department of Justice Anti-Fraud Task Force and an all-of-government Identity Theft and Public Benefits Initiative.
Read more: https://www.axios.com/pandemic-unemployment-fraud-benefits-stolen-a937ad9d-0973-4aad-814f-4ca47b72f67f.html
A lot of it is scammers, international gangs with some foreign state affiliation, and professional fraudsters.
Much of the blame lies with the state governments that didn't take precautions against international wire fraud.
Under "how it works" the article links to another article on how the Secret Service is uncovering the ways state government payouts were hijacked by criminals using identity theft.
bucolic_frolic
(43,030 posts)IRS still dragging its feet
soothsayer
(38,601 posts)I was reading somewhere.... like this
Link to tweet
?s=21
WFAA
@wfaa
Millions of people have received 'plus-up' payments from the third stimulus check.
Stimulus checks keep coming. Here's who just got them.
wfaa.com
https://t.co/ZuM0AaNaPt
bucolic_frolic
(43,030 posts)Paper file, UT processing center. Did they get it? Who knows. Have they been slow before? Yes. Months, August. Why? I have no idea. How long will I wait? Probably about another month or so. What will I do? Write them a letter.
Hey, it's a plan.
jmbar2
(4,860 posts)I had forgotten that you were still trying to track your stim down.
I was in the same boat. My solution was to do change of address form, and then file my taxes to that address. The check was released about 2 weeks later.
I had moved, and my last tax return was at another address. IIRC, you had no address change, so still a mystery.
Good luck.
Hugh_Lebowski
(33,643 posts)"CEO of ID.me, a service that tries to prevent this kind of fraud"
You think this person might have some motivation to inflate the numbers?
I'm sure it was a problem and money was stolen, but I find it hard to believe that anywhere near 50% of the benefits paid were stolen by fake people.
States tend to be pretty damn tough to pry UI benefits out of in my experience.
Bucky
(53,936 posts)here's a link ==> https://krebsonsecurity.com/2020/05/u-s-secret-service-massive-fraud-against-state-unemployment-insurance-programs/
It'd be nice if the estimate is high and that gets corrected. But the late Trump Administration was not good at coordinating LEAs to do due diligence. And state unemployment agencies, who were the parties most likely to be ripped off, were probably understaffed due to the pandemic and them still learning how to master the large-scale "work from home" trick.
State agencies, particularly in red states, are often underfunded and technologically a generation behind the curve.
Progressive Jones
(6,011 posts)Hugh_Lebowski
(33,643 posts)I'm sure there was 'an issue' but I seriously doubt that 50% is a remotely reasonable number.
LymphocyteLover
(5,636 posts)milestogo
(16,829 posts)I was furloughed for 2 months last year, and during that time I opened a claim. I went back to work in June. In October I got some funky things in the mail from the workforce dept. but I didn't question it.
When it was time to file my taxes I tried to log in and get my tax form. My account had been deleted. Eventually I was able to get back in, and learned that my account was hacked in October. Somebody got paid for 2 weeks, and then it was flagged because they had changed the bank account and address. That's all they collected.
I eventually talked to an investigator, and she told me that normally I would have been called as soon as they caught it, but there were so many accounts hacked that they couldn't keep up. And they have lousy security.
I still haven't gotten a corrected tax form for 2020.
Bucky
(53,936 posts)milestogo
(16,829 posts)oldsoftie
(12,486 posts)machoneman
(3,996 posts)Oh, and sure, the fellow quoted runs a firm that specializes in "risk solutions". How quaint!
Let's hear from the US Treasury, the FBI, Homeland Security, et al, before buying into this story. Heck even the N.Y.Times, Washington Post and other reputable newsies need to fill us in. Until then don't trust!
Sibelius Fan
(24,392 posts)is bad, money gets stolen, best thing to do is not even have it.
Bucky
(53,936 posts)Nevermind it happened under Trump.
Nevermind it was state governments falling for the scams.
Nevermind it exposes how vulnerable our state governments are to fraud and identity theft crimes.
This is why we should share this kind of info in the LBN forum. When we run into the RW spin, we have facts to punch back.
Bucky
(53,936 posts)I don't doubt we'll hear about this from Fox & Clones in the coming days. They'll probably leave out the bit about this happening under Trump's watch and it being mostly due to inept state governments getting ripped off.
I'm all for being skeptical about news reports. But I prefer to have something to back it up before judging it to be wingnut BS
Yo_Mama_Been_Loggin
(107,711 posts)I received an e-mail from my state's Employment Security Department about a claim for unemployment I supposedly filed. I was pretty quick to notify them that I had not filed a claim. Turned out quite few fake claims were filed in Washington state.
I'm sure it was likewise in many other states.
DanieRains
(4,619 posts)It delayed the claims, but I don't think many frauds were sent out.
monkeyman1
(5,109 posts)don't fl. unemployment system rick scott built to fail & screw up the work's !! Florida is still a mess ! between scott & DEATHSENTENCE it will be for sometime !!
oldsoftie
(12,486 posts)You wouldnt believe the shit people are doing. Not just unemployment, but more with the PPP. I'm thinking at some point most of them are gonna get caught, but who knows. I warned several but fell on deaf ears
Hugh_Lebowski
(33,643 posts)Because so much payroll is done by a relative handful of companies, it's quite possible to compare claim counts at the UI office with layoffs/firings data from the various payroll companies and do statistical analysis of the likely levels of fraudulent claims/payouts.
As such, I'd imagine we'll get a pretty reliable 'official' estimate at some point ... in the meanwhile I'll take the estimates coming from the CEO of a risk management company with the proverbial salt grains.
Cryptoad
(8,254 posts)no federal monies should be allocated to citizens by state gubermints.....especially MAGA States!
I really think you're taking the wrong lesson from this.
A fully centralized, nation-wide system of unemployment services would be nearly unmanageable. The states should do a better job, absolutely. But federalizing it would be such a mess, from the standardization & integration of data banks to the replication of every single state's bureaucracy and services options by a federal bureaucracy, to the duplication of local contacts and contractors involved in retraining and employment outreaches. Not to mention the conflicts and hostilities it'd create between federal authorities and those in the states watching the federal government usurp their functions and responsibilities.
Nope, we only need one nightmare at a time.
Probatim
(2,499 posts)As such, they build in ridiculous obstacles for claiming UI so people decide not to apply. Organized crime might take advantage of these situations to exploit people who can't through to the system and take their benefits in their names.
MichMan
(11,865 posts)California maximum is $450 per week. Kentucky is $552 and North Dakota is $618 per week. In my state it is a paltry $362
Progressive Jones
(6,011 posts)Leave UI to each State. I know that a lot of States don't run things very well.
I've had no problems here in IL, but we're not run by Republicans, so there you go...
hamsterjill
(15,220 posts)Then red state governors couldnt decide to kick people off with the intention of forcing people to work for lower wages.
Probatim
(2,499 posts)They'd received notice of her claim and, given her senior role in the organization, thought they'd check in to make sure that wasn't the case.
She's now signed up for identity theft garbage and will be monitoring her finances for months.
Marrah_Goodman
(1,586 posts)You can report someone using your own information, but there is no way to turn someone in for claiming they are self-employed. I know a bad person who did this and had received tens of thousands of dollars on unemployment. He is an addict and hasn't worked in 20 years.
My last attempt was 6 months ago with a letter to the attorney general and to unemployment. Nothing was done.
oldsoftie
(12,486 posts)People say "Well, report them!"
Nobody cares
MrModerate
(9,753 posts)The "How it Works" part didn't describe any actual instances of the con and certainly didn't suggest any particular expertise on the part of Axios's reporter.
Bucky
(53,936 posts)or reports from the Secret Service
https://krebsonsecurity.com/2020/05/u-s-secret-service-massive-fraud-against-state-unemployment-insurance-programs/
or Wall Street Journal
https://www.wsj.com/articles/unemployment-benefits-fraud-has-soared-in-the-pandemic-heres-what-to-do-11619688601
or the US Attorney's office in PR
https://www.justice.gov/usao-pr/pr/twelve-individuals-indicted-and-arrested-unemployment-benefits-and-pandemic-unemployment
or Forbes..?
https://www.forbes.com/advisor/personal-finance/identity-theft-unemployment-benefits-fraud/
MrModerate
(9,753 posts)Which is so pervasive that it can intercept any massive payment stream from a government to its citizens.
That sounds to me like the much bigger story.
Bucky
(53,936 posts)Glad to see you're "buying it" now.
MrModerate
(9,753 posts)Still earns the reporter bad marks.
Jon King
(1,910 posts)I put stole in quotes because it was not technically illegal, just highly scummy. Im sure he is typical of guys who love to milk the system. White guy, MBA, worked for venture capital firms, started his own private venture firm 10 years ago, lives in a $2 mil house, wife works, only kid out of college and long gone. They have more money than they will ever need.
I am sure he did not think anyone would ever know but they published all the corporations who took money. He took $49400 because the audit threshold was $50,000. It was labeled 'payroll'....he is the only employee, always was, works out of his mansion so the virus stuff did not stop his work, and that $49,400 is meaningless to him.
But I imagine him and all his buddies in his circle telling each other how to take it and get away with it. That money was meant to keep mom and pop restaurants and businesses from having to fire all their people. Scumbags like this guy and many others felt the need to further abuse the system, disgusting.
Hugh_Lebowski
(33,643 posts)TONS of people have been caught taking the business benefits illegally but that's a different subject. Just saying
Jon King
(1,910 posts)They had no checks and balances on the types of businesses that could get those payroll sustaining payouts.
jmbar2
(4,860 posts)totodeinhere
(13,056 posts)fraud.
However, the take away is not that there is anything wrong with the inherent concept of unemployment insurance. UI needs to continue while greater efforts need to be employed to fight fraud. But this should not mean making it more difficult for legitimate, honest UI insurance recipients.
Hugh_Lebowski
(33,643 posts)totodeinhere
(13,056 posts)Hugh_Lebowski
(33,643 posts)LymphocyteLover
(5,636 posts)dalton99a
(81,391 posts)rockfordfile
(8,695 posts)MichMan
(11,865 posts)Yet, they declined to take her state issued computer and didn't cancel her log in password and access, so she continued to do it for another month after being fired. She was working from home.
Complete incompetence.
TheFarseer
(9,317 posts)That were called by unemployment offices trying to verify that people who still worked there were let go. I bet some were overwhelmed with inquiries and everything else and didnt bother to check.