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Saturday, May 16, 2020

COVID-19 UNEMPLOYMENT SCAM UPDATE- Crime Ring Targets Washington Unemployment Payments


Brian Krebs of the Krebs on Security blog reports that a well-organized Nigerian crime ring is targeting the Washington State unemployment system, as well as unemployment systems in other states, to steal funds intended for legitimate unemployment claims.

Brian Krebs is a long-time journalist who specializes in cyber-security issues.

A Secret Service internal memo says that the ring uses Social Security numbers and other personal information from identity theft victims to file for unemployment payments. The memo also notes that “a substantial amount of the fraudulent benefits submitted have used PII from first responders, government personnel and school employees.”

The ring has unemployment checks sent to a variety of addresses throughout the United States. Oklahoma addresses seem to be popular destinations for the checks. Krebs on Security quotes an Oklahoma Bankers Association official as saying that earlier this week member institutions started seeing transfers of funds tied to unemployment claims for people in Washington. Many of the transfers were in the $9,000 to $20,000 range with one transfer for over $29,000.

The ring apparently uses money mules to launder the funds. The mules are recruited from online romance scams or work from home scams that prey on lonely people or people in need of money. In the case of a romance scam, the fraudster will ask the victim to do a favor of accepting some funds in their bank account, often couching it as for a charitable organization or purpose. Then the mule forwards the funds to an account controlled by the fraudster. This intermediate step launders the money, taking risk away from the fraudster, placing the mule at risk.

Other states that have been affected by this scam so far include North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming, and Florida.

This activity shows that current scam organizations have the capability to quickly take advantage of a new situation such as COVID-19. The method being used is similar to scam operations that file fraudulent income tax returns with the IRS to receive refund checks.

Shutting down an operation like this may be difficult, even for a national law enforcement agency like the Secret Service. The scammers are in a foreign nation where our law enforcement does not have jurisdiction. The nation may not cooperate or may not be able to cooperate in helping shut down the ring. The Secret Service may be able to discourage potential mules by revealing to them the true nature of their relationship or if necessary, placing charges against them. But the scammers can find other victims to do their dirty work for them. Another strategy is for each state to tighten up their security to not allow easy access to their unemployment system.

                                                                          

Krebs on Security:


The Seattle Times:


FBI:





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