Fraudsters received $400 billion in unemployment benefits
Fraudsters received $400 bil...
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Fraudsters received $400 billion in unemployment benefits

13 June 2021
2 min.
Fraudsters received $400 billion in unemployment benefits

Unemployment benefits

Fraudsters have stolen $400 billion in unemployment benefits that the US authorities have assigned to citizens. This amount represents almost half of all payments sent to unemployed Americans. Most of the stolen money has flowed abroad, including to Russia. The criminals used stolen personal details of unemployed Americans to make false claims for benefits.

According to cyber-security firm, the US has lost more than $400 billion to unemployment benefit fraud. Blake Hall, head of the firm, noted that this is almost half of all the payments the authorities have assigned to unemployed people in the US.

Fraudsters secretly steal personal information and then use it to impersonate the claimant and embezzle the payments. There is another way: the perpetrators trick a person into sharing their personal details.

The CEO of LexisNexis Risk Solutions said that at least 70% of the stolen money later ended up in other countries. According to him, most of the money had leaked into the hands of criminal gangs in China, Nigeria and Russia. It turns out that a national security issue has been raised. However, the US Department of Treasury would not comment on the situation.

As of 8 May, more than 3.7 million people in the US were receiving unemployment benefits. Before the pandemic and the quarantine restrictions, the number of jobless claims was no more than 300,000. In mid-March 2020 at the height of the pandemic it surged by 3 million to an all-time high and a week later to more than 6.6 million.

Previously, unemployment benefits did not attract the attention of fraudsters they could not make much profit. But that changed when the payments became the main means of keeping the economy afloat.

The US Federal Trade Commission received more than 394,000 complaints last year from citizens that their personal details had been illegally used to apply for government benefits. Mostly fraudsters used the information to claim unemployment benefits. The number of such reports increased by 3,000% compared to 2019.

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