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Director of Cybersecurity programs Leslie Corbo talks with Bloomberg Law about COVID-19 Scammers
Covid-19 Scammers Driving Unemployment Fraud Across Nation
Unemployed Americans aren’t the only ones waiting for the next pandemic relief check. A slew of fraudsters, including an organized Nigerian cybercrime ring, are also looking to get paid.
And they have plenty of tricks to pull it off—like using the names of dead people and personal information collected in previous data breaches to create false beneficiaries to gain access to benefits meant to help workers.
At least 11 states are seeing an increase in fraudulent unemployment insurance activity fueled by the millions of claims coming in each month and additional federal dollars being offered to the unemployed due to the coronavirus pandemic.
Places including Arizona, Colorado, Maryland, New York, Ohio, Texas, and Washington combined are reporting billions of dollars in fraud, according to a Bloomberg Government review of unemployment actions across the nation. States and the U.S. Department of Labor and FBI have issued alerts.
The rise in criminal activity not only leads to less money for the unemployed, but also could increase contribution rates for businesses, lead to a loss of funds for states, and add to the federal deficit, experts say.
“It’s its own cyber pandemic,” said Leslie Corbo, director of cybersecurity programs and associate professor of cybersecurity at Utica College.
“They’re taking advantage of a bad situation right now,” she said of the scammers. “I think it’s going to continue until there’s some kind of controls that are put in place.”
An Enticing Opportunity
The increase in fraud is driven largely by the rush of legitimate claims coming in, and pressure on state governments to get benefits out as soon as possible, Corbo said. Many government controls were relaxed in an effort to get the funds out, she said.
The situation is exacerbated by the availability of personal information on the “dark web” as a result of major security breaches, as well as the push to get government services online, experts said.
The $2.2 trillion federal CARES Act, which provided an additional $600 a week in benefits per person, created an even more enticing opportunity for fraud, said Douglas Holmes, president of UWC – Strategic Services on Unemployment & Workers’ Compensation, a business group.
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