Columbus, Ohio At a time when another round of aid for the unemployed is about to be distributed, the US states are exposed to a new wave of fraud, as they seek to modernize their security systems and block fraudsters who have already diverted billions of dollars from programs designed to support the people the epidemic has rendered unemployed. .
Scams evade taxpayers, delay legitimate payments, and make thousands of Americans victims of identity theft. Many states have failed to protect their systems adequately, and a review by The Associated Press found that some will not even publicly acknowledge the scale of the problem.
Massive fraud stems from past identity thefts of banks, credit rating agencies, healthcare systems, and retail stores. Fraudsters, sometimes in China, Nigeria or Russia, get stolen personal information on the black internet and use it to flood jobless support systems with fake apps.
Joshua Steve, a spokesperson for the agency’s criminal department, said the Justice Department is investigating unemployment scams by “transnational criminal organizations, seasoned national perpetrators, and individuals across the United States.”
The Department of Labor’s Office of the Inspector General estimates that more than $ 63 billion in incorrect payments have been spent since March through fraud and errors, nearly 10% of the total amount paid since March as part of related unemployment programs.
“We know there’s an epidemic of fraud,” said US Rep. Kevin Brady, the highest-ranking Republican on the House Revenue and Tax Committee. The legislator noted that the estimate of $ 63 billion “is greater than the full budget of the Department of Homeland Security.”
“These are frightening levels of fraud,” he declared.
California was the main target, with fraudulent payments totaling around $ 11 billion and nearly $ 19 billion in suspicious accounts. Colorado paid about 6.5 billion to the fraudsters, an amount similar to what it allocated to legal beneficiaries.
Other estimates, according to AP reports in other states, range from several hundreds of thousands of dollars in less populated states like Alaska and Wyoming to hundreds of millions in more populous states like Massachusetts and Ohio.
National fraud feeds two weaknesses: a massive increase in jobless claims since the pandemic began that has overwhelmed state agencies, and outdated benefit systems that are easy prey for persistent and skilled criminals.
In Ohio, weekly jobless claims for the first time ranged from 17,000 to more than 40,000 during the pandemic. But since the end of last month, these requests have crossed 140,000 in a few weeks, and many of them are believed to be fraudulent. The state has paid at least $ 330 million in fraudulent claims to support unemployment.
Attempting to spot too many erroneous requests is delaying the payment of legitimate requests from residents who really need help. In Upper Arlington, a suburb of Columbus, Cynthia Spiritoli received $ 228 a week after being laid off last March from her job at a nonprofit that ran student exchange programs.
In January, her payment of those benefits was suspended after the state reported that someone had tried to use her identity to fraud. She thought the problem was resolved, but she has yet to receive a new check that she and her husband use to help pay for their son’s hearing and vision treatment.
“It’s not a good way to take care of people,” said Spartoli, 49.
Mulveyhill reported from Sherry Hill, New Jersey.
Associated Press journalists Kimberly Croese in Nashville, Tennessee; Sarah Rankin in Richmond, Virginia; Todd Richmond in Madison, Wisconsin; Casey Smith of Indianapolis contributed to this report.