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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