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Fraud overwhelms unemployment system




States are being flooded with new fraud cases as cybercriminals scammers steal billions of dollars from pandemic-related unemployment services and making thousands of Americans victims of identity theft. Fraudsters, have purchased stolen personal identifying information on the dark web stemming from a previous data breach. Next, they use the stolen data to enter phony unemployment claims and directing the funds into their own bank accounts. The U.S. Justice Department is investigating unemployment fraud by “transnational criminal organizations, sophisticated domestic actors and individuals across the United States,” said Joshua Stueve, a spokesman for the department's criminal division.

The Labor Department inspector general’s office estimates that more than $63 billion has been paid out improperly through fraud or errors — roughly 10% of the total amount paid under coronavirus pandemic-related unemployment programs since March.


California has been the biggest target, with an estimated $11 billion in fraudulent payments and an additional $19 billion in suspect accounts. Colorado has paid out nearly as much to scammers — an estimated $6.5 billion — as it has to people who filed legitimate unemployment claims.

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