As much as half of the unemployment benefits paid out amid the coronavirus pandemic may have been stolen by criminals, Axios reports.
Blake Hall, the CEO of the fraud-prevention company ID.me, told the outlet that up to 50% of the $400 billion in pandemic unemployment may have been stolen.
Haywood Talcove, the CEO of LexisNexis Risk Solutions, estimated that at least 70% of the stolen money was likely taken out of the country and ended up in the hands of “criminal syndicates in China, Nigeria, Russia and elsewhere,” according to the report.
"These groups are definitely backed by the state," he said.
Much of the rest of the estimated $400 billion was likely stolen by street gangs, according to the analyses.
Scammers often steal identifying information and use it to impersonate laid-off workers, according to the report. In some cases, people are tricked into providing their personal information.
These groups then use “mules” to withdraw money at ATMs which can then be transferred overseas, typically using cryptocurrencies like bitcoin.
Such unemployment fraud was rare before the pandemic but the massive sums of cash the federal government injected into the program made it a ripe target and states were largely unprepared to expand their unemployment systems to the number of people who lost their jobs last year.
Feds have lower estimate:
The Labor Department’s inspector general offered a much lower estimate earlier this year, though the office admitted that the actual number is likely “much larger.”
The IG report estimated that $5.4 billion was paid to fraudulent claims last year.
The report said that at least 10% of the benefits paid in California have been to fraudulent claims though the number may be as high as 27%.
New York reported $1 billion in fraudulent claims. Maryland reported $501 million.