![]() ![]() (Bernsen and officials for other states say the damage could've been even worse: They say they've been able to stop billions of dollars' worth of bogus claims before they got paid.) “The system was the victim of what is one of the largest internet crimes in history, perpetrated against all 50 states at extraordinary levels," said James Bernsen, a spokesperson for the Texas Workforce Commission. The numbers have tailed off in Texas, whose agency says it now suspects fraud in about 14% of its claims. The equivalent agency in California has confirmed fraud in about 10% of its payments and said it's investigating a further 17%. Rhode Island's labor agency said in March that it suspected fraud in 43% of the claims it had received. In Vermont, as many as 90% of claims in some months were determined to be fraudulent, state officials said in June. The fraud estimates provided by states so far range from high to jaw-dropping. (There are innocent explanations for at least some of the disparity: If a person loses a job more than once during a given year, they can legitimately file for benefits more than once during that time.) By contrast, about 23% of American workers were out of a job or underemployed at the peak of the pandemic, according to the Bureau of Labor Statistics in the most recent report that figure is just under 10 %. In five states - Arizona, Georgia, Hawaii, Nevada and Rhode Island - the initial claims outnumbered the entire pool of civilian workers. from March to December 2020, the number of initial claims equated to 68% of the country's labor force, which stood at around 164 million before the pandemic. In state after state, the volume of initial jobless claims has far exceeded the number of estimated job losses. But ProPublica performed a data analysis that hints at the massive scope. Nobody has yet come close to putting a definitive number on the dollar value of fraud relating to pandemic-era unemployment benefits. But after ProPublica's inquiry, 10 of the channels we asked about suddenly went dark, marked with this notice: “This channel can't be displayed because it violated Telegram's Terms of Service." Telegram did not respond to requests for comment. Participants in those forums have been talking about turning their efforts to Pennsylvania, where officials recently said they have “noticed an uptick" in fraudulent claims. Users have created two Telegram channels in which they trade tips for filing claims in Maryland, whose labor department recently said it detected some 508,000 potentially fraudulent jobless claims between the start of May and mid-June. Some of the forums have thousands of participants and regularly offer stolen identities for sale, alongside tech tips, screenshots that ostensibly prove the methods work and advice on which states are easiest to game and which are “lit" - that is, still paying out fake claims. Hustlers advertise their techniques - or “sauces" (apparently short for “secret sauce") - for filing bogus claims, along with state-specific instructions on how to get around security checks, according to a ProPublica review of messages on more than 25 such chat forums. Communities have sprouted on messaging apps such as Telegram, where fraudsters trade tips on how to cash in. Much of it is geared toward exploiting aging or obsolete state unemployment systems whose weaknesses have drawn warnings for decades. In addition, the fraud has been enabled by a burgeoning online infrastructure, whose existence has not previously been reported in the mainstream press. And others, located as far away as China and West Africa, have organized low-wage teams to file phony claims. Fraudsters have used bots to file online claims in bulk. A ProPublica investigation reveals that much of the fraud has been organized - both in the U.S. Twenty-nine states paid up, sending $222,532.īut the problem extends far beyond a plague of solo scammers. Department of Labor, used a single Social Security number to file unemployment insurance claims in 40 states. (The broker has pleaded guilty, while the Bronx man and Nigerian official have pleaded not guilty.)įraudsters have filed in high volumes, sometimes obtaining payments from multiple states, despite the fact that a jobless person is barred from getting assistance in more than one state. history: filing bogus claims for unemployment insurance benefits during the COVID-19 pandemic. ![]() What they all had in common, according to federal prosecutors, was participation in what may turn out to be the biggest fraud wave in U.S. A Nigerian government official is accused of pocketing over $350,000 in less than six weeks. A California real estate broker raked in more than $500,000 within half a year. A Bronx man allegedly received $1.5 million in just ten months. ![]()
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