Who made out from unemployment relief funds? New report says half was stolen and sent out of the country.

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A shocking report by Axios has revealed that in the neighborhood of half of unemployment benefits the U.S. has been pumping out of money we don’t have over the past year may have been stolen by criminals.

The report tells us that unemployment fraud during the pandemic may reach nearly half-a-trillion dollars, and will easily reach $400 billion, according to estimates.

Even worse, a majority of the money ended up in the hands of foreign crime syndicates. In other words, it isn’t just a crime, it’s a national security issue. But keep listening to Biden and the Democrats telling us the greatest threat to our country is global warming and white supremacy.

How did this come about? When COVID-19 struck the U.S. at the end of winter 2020, most states were not prepared for the onslaught of unemployment claims, brought forth by draconian government shutdowns of businesses, which put tens of millions of Americans out of work.

Being totally unprepared, federal and state governments were more interested in getting the money out quickly instead of taking precautions to prevent the fraud that inevitably occurred. That in turn led to a wave of bogus unemployment claims being filed…and paid.

According to Blake Hall, CEO of ID.me, a service that attempts to prevent this very type of fraud told Axios that the U.S. lost over $400 billion to fraudulent claims, or around 50% of all unemployment money to criminals.

Meanwhile, Haywood Talcove, CEO of LexisNexis Risk Solutions estimates that over 70% of that money ended up leaving the country, with much of it ending up in the hands of criminal syndicates in China, Nigeria, Russia and others.

Talcove said the groups involved were “definitely backed by the state.” In other words, they were acting at the behest of the political leaders of those countries.

He also said that much of the rest of the money was stolen by street gangs in the U.S., who have made up a more significant share of the fraudsters in recent months. Of course, the Biden administration is trying to lay the blame on—who else—President Trump’s administration.

“Widespread fraud at the state level in pandemic unemployment insurance during the previous administration is one of the most serious challenges we inherited,” squawked White House economist Gene Sperling.

This is of course absurd, since state-level unemployment insurance is managed by individual state governments—not the White House. But we digress.

“President Biden has been clear that this type of activity from criminal syndicates is despicable and unacceptable. It is why we passed $2 billion for UI modernizations in the American Rescue Plan, instituted a Department of Justice Anti-Fraud Task Force, and an all-of-government Identity Theft and Public Benefits Initiative.”

Biden (and his sycophants) claim that scammers stole personal information and use it to impersonate claimants. Of course, this is absurd to relate this specifically to unemployment fraud of COVID relief moneys, since identify theft is and has been a widespread problem in the United States for decades. That is why you have identity theft protection companies far and wide. But it’s much easier for Biden and his cronies to lay the blame on Trump.

So how it works is that scammers steal personal information and use it to impersonate claimants. Nothing new there. Other groups trick individuals into voluntarily handing over their personal information. Again, nothing new. Think “rich Nigerian business owner” emails.

Scammers use “mules”—low level criminals who are given debit cards and asked to withdraw money from ATMs. That money is then transferred to foreign countries, often using digital currency such as bitcoin.

So, what is different now? As Axios notes, prior to COVID, unemployment claims were relatively rare (especially in the time between January 2017 and the beginning of the pandemic) and lasted for a fairly short period of time. As such, international criminal syndicates weren’t attracted to them as being a lucrative target.

However once unemployment took a primary role in trying to keep the economy moving, foreign actors became interested due to the amount of money that was being pumped into that segment of the economy. As Axios also noted, the unemployment programs were being run by bureaucrats who were not as quick to crack down on criminals as private companies normally would be.

Axios also said that unemployment fraud is actually now offered on the dark web on a “software-as-a-service basis, similar to ransomware. States without any type of fraud-detection services are the primary targets.

Finally, what does all of this mean? Just like closing the barn door after the horses get out, states are finally stepping up their game to prevent this type of fraud. $400 billion dollars? Sounds like far too little too late.

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The Biden administration is actually pretty good at getting bilked out of money by foreign scammers. We reported in February about one of his cabinet picks who got bilked by Nigerian scammers. For more on that, we invite you to:

DIG DEEPER

The following article contains editorial content written by a retired Chief of Police and current staff writer for Law Enforcement Today. 

WASHINGTON, DC- You’ve gotta hand it to Joe Biden. He is appointing some stone cold geniuses to key positions in his administration.

The latest rocket scientist appointed is a Democratic donor who Biden named acting assistant secretary at the Employment and Training Administration within the Labor Department.

Suzi LeVine’s claim to fame is getting bilked out of millions of dollars of coronavirus relief funds to Nigerian scammers in her last position, the Washington Examiner reports.

LeVine, in her former position at Washington state’s Employment Security Department is under scrutiny after audits discovered over $600 million of unemployment funds had been lifted by the cybercriminals.

In her new position, LeVine will be responsible for helping oversee Biden’s coronavirus recovery program and was met with a lot of questioning by people inside and outside of Washington state.

“Washington residents who have seen massive error after massive error from LeVine’s Employment Security Department are dumbfounded that she would be getting a promotion,” said Rep. Jaime Herrera Beutler of Washington.

“This isn’t a ceremonial title or a cushy spot for donors, it’s a crisis management role and one she’s already failed miserably.”

LeVine no doubt was elevated to her position due to her being a major Biden donor along with her husband and served until recently as deputy finance chairs for the Democratic National Committee, her LinkedIn profile says.

Bloomberg Law reports that LeVine and her husband donated $400,000 to the Biden campaign and other Democratic causes over the past two years, according to federal campaign records.

The scam caused an uproar within Washington, with the huge amount of fraud causing significant delays in unemployment benefits of legitimate beneficiaries during a period when hundreds of thousands of people were dealing with the economic impact of the coronavirus pandemic.

Fox News reports that the fraudulent unemployment claims are part of a well-organized Nigerian fraud ring using identities stolen in prior data breaches, including the 2017 Equifax breach which exposed hundreds of thousands of victims’ information.

Fox says that over 122,000 fraudulent claims took advantage of the unemployment funds.

According to the Secret Service, Washington was the primary victim of the scam, although several other states were targeted.

In a separate case, California has an unemployment scandal of its own, with over $11 billion in funds missing with the possibility of an additional $20 billion still being investigated.

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The new role will have LeVine helping oversee an annual budget of around $9 billion—about three-quarters of the overall Labor Department funding, and the division will be key in helping the scalded labor market recover.

While LeVine will initially have “interim” in front of her new job title, she would need to be confirmed by the Senate in order to get the permanent gig, and one could imagine she might have a difficult time getting through the confirmation process. Although if early returns on Senate Republicans is any guide, they’ll put their tails between their legs and she will sail through, despite her obvious incompetence.

LeVine has come under fire after a recent state audit criticized the Employment Security Division under her for failing to address a software vulnerability which led to last year’s massive fraud, according to the Seattle Times.

LeVine said in May when announcing the scam that state officials were trying to recover as much of the stolen money as possible, noting the state had taken steps to prevent new fraudulent claims, however, didn’t detail what steps had been taken.

“ESD did not have effective internal controls in place to ensure unemployment benefit payments were made only to eligible claimants,” it concluded.

One such Nigerian ring, nicknamed “Scattered Canary” by the cybersecurity firm Agari discovered that they used stolen information such as home addresses and social security numbers to file claims, adopting a technique used widely in tax fraud.

The Times was told last year by the ESD that the number of fraudulent claims in the state jumped by 27 times between last March and April, as the scammers tried to cash in on extra COVID-19 payments and trillions of dollars in emergency cash.

That incident led to a Secret Service warning to states to keep an eye out for scammers, while in Washington, the crisis led to delays in processing of legitimate claims. In fact, things got so bad that the National Guard was deployed to help process the backlog.

At that time LeVine said the ESD had “made changes” that prevented hundreds of millions of additional dollars going to the scammers. Just in the nick of time, right?

“We do have definitive proof that the countermeasures we have put in place are working,” she said.

For her party, Rep. Beutler wrote a letter to Biden this past week demanding LeVine be removed from the new position.

“Her mistakes that led to the largest fraud in Washington state history were matched by the poor service that defined her tenure,” Beutler wrote, along with two other Republican House members.

In Washington State, Caleb Heimlich, chairman of the Washington State Republican Party said:

“This nonsensical and alarming appointment should come as a warning to the American people. President Joe Biden, like [Washington Gov.} Jay Inslee, cares more about rewarding his political donors than hardworking Americans.”

LeVine is a long-time Washington, DC swamp creature, having formerly served as ambassador to Switzerland under former President Obama.

According to the Seattle Times, LeVine is described as a “potent, behind-the-scenes force in Democratic politics,” while noting that she had invited a number of 2020 presidential candidates to her home.

The Examiner said neither the Washington Department of Labor nor the White House responded to requests for comment.

The ESD blamed in part a policy put in place by Gov. Jay Inslee, which eliminated a waiting week between when a claim is filed and when the benefit was paid. Because of that change, the agency couldn’t always verify a claim with employers prior to payment being made.

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