The Fraud Examiner

Twin Pandemics: COVID-19 and Unemployment Fraud
 

Julia Johnson, CFE     
Research Specialist, Association of Certified Fraud Examiners                                 


As the COVID-19 pandemic continues to create turbulence throughout the global economic system and job market, unemployment claims have skyrocketed. According to NPR, 42.6 million new unemployment insurance claims were made in the U.S. during the past 11 weeks. Individuals who might not have qualified for these benefits prior to the pandemic are now eligible to receive substantial weekly payments with an additional federal stipend of $600. During this time of crisis, fraudsters have surfaced to take advantage of government payments intended for those relying on these funds to make ends meet.

Fraudulent unemployment claims related to COVID-19

The U.S. Secret Service recently unveiled a report detailing a massive fraud being committed against state unemployment insurance programs. According to this report, a well-organized Nigerian crime ring has been filing unemployment claims in various states using Social Security numbers and other personally identifiable information belonging to individuals who were previously victims of identity theft. The states most affected by this targeted crime ring include North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida. State unemployment agencies realized something was amiss when individuals began receiving notices from their offices or their employer for unemployment applications that they had never submitted.


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