Explosion Of Unemployment FraudFraud In law, fraud is intentional deception to secure unfair or unlawful gain (money or other assets), or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation) or criminal law (e.g., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities), or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements. A fraud can also be a hoax, which is a distinct concept that involves deliberate deception without the intention of gain or of materially damaging or depriving a victim. In the U.S.

During the Pandemic, the United States is experiencing a Massive upsurge in Unemployment Fraud!

According to the U.S. Secret Service: “Massive Fraud” Against State Unemployment Insurance Programs

A well-organized Nigerian crime ring is exploiting the COVID-19 crisis by committing large-scale fraud against multiple state unemployment insurance programs, with potential losses in the hundreds of millions of dollars, according to a new alert issued by the U.S. Secret Service.

A Real Warning Of Massive Unemployment Fraud!

During the current pandemic, the problem of Unemployment Fraud has exploded.

Scammers are also using other kinds of compromised relationships (from relationship scamsRelationship Scam A Relationship Scam is a one-to-one criminal act that involves a trust relationship and uses deception & manipulation to get a victim to give to the criminal something of value, such as money! Click here to learn more: What Is A Relationship Scam?) to use identity information from their victims, and even access to financial accounts, to create new fraudulent accounts.

From our SCARS Partner Shannon Slaughter

We have been notified by fraudulent unemployment claim victims that deposit accounts are being opened for the purpose of receiving these benefits.

I suspect it is because state agencies are getting wise to the money muleMoney Mule A money mule sometimes called a "smurfer," is a person who transfers money acquired illegally (e.g., stolen) in person, through a courier service, or electronically, on behalf of others (usually criminals that they are knowingly or unknowingly affiliated). Typically, the mule is paid for services with a small part of the money transferred - but not always. Mules may or may not be aware that they are performing these actions. Money mules are often dupes recruited online for what they think is legitimate employment, not aware that the money they are transferring is the product of crime. The money is transferred from the mule's account to the scam operator, typically in another country. Similar techniques are used to transfer illegal merchandise. Mules can be prosecuted for numerous crimes. activity we are used to seeing with this fraud and the fraudsters are now opening deposit accounts in the names of the victims in order to make it look legitimate.

What tips them off is the welcome letter and/or debit card they receive.

I also suspect (no confirmation yet) the fraudsters are transferring the money out via P2P or A2A and that’s why the fraudsters don’t need the debit cards. Fraudsters are currently targeting fintechs and large FIs [financial institutions] to open these accounts.

If you are a victim of a fraudulent unemployment benefit claim, KEEP A CLOSE EYE ON YOUR CREDIT REPORT.

FIs [financial institutions] do not hard hit the credit bureaus anymore for deposit accounts so the only way you will find out is if the account charges off and goes to collection.

I highly recommend placing an alert or freezeFreeze Trauma Freeze Response: While fight-or-flight is the better-known way humans respond to certain stressful stimuli, the additional less known third response "FREEZE", was not as widely studied until this last decade. Freezing as a response to a threat might seem effective, a sort of “playing dead” in the face of danger; however, in humans freezing manifests as an inability to communicate, react, make decisions, or take any action of self-preservation or defense. on ChexSystems if you have been notified of a fraudulent unemployment claim as it is currently the most widely used product for new customer/member deposit account openings. PLEASE SHARE!

FBIFBI FBI - Federal Bureau of Investigation The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice, the FBI is also a member of the U.S. Intelligence Community and reports to both the Attorney General and the Director of National Intelligence. A leading U.S. counter-terrorism, counterintelligence, and criminal investigative organization, the FBI has jurisdiction over violations of more than 200 categories of federal crimes, including financial fraud. Sees Spike in Fraudulent Unemployment Insurance Claims Filed Using Stolen Identities

The FBI has seen a spike in fraudulent unemployment insurance claims complaints related to the ongoing COVID-19 pandemic involving the use of stolen personally identifiable information (PII).

U.S. citizens from several states have been victimized by criminalCriminal A criminal is any person who through a decision or act engages in a crime. This can be complicated, as many people break laws unknowingly, however, in our context, it is a person who makes a decision to engage in unlawful acts or to place themselves with others who do this. A criminal always has the ability to decide not to break the law, or if they initially engage in crime to stop doing it, but instead continues. actors impersonating the victims and using the victims’ stolen identities to submit fraudulent unemployment insurance claims online. The criminals obtain the stolen identity using a variety of techniques, including the online purchase of stolen PII, previous data breaches, computer intrusions, cold-calling victims while using impersonationImpersonation An impersonator is someone who imitates or copies the behavior or actions of another. There are many reasons for impersonating someone, such as: part of a criminal act such as identity theft, online impersonation scam, or other fraud. This is usually where the criminal is trying to assume the identity of another, in order to commit fraud, such as accessing confidential information or to gain property not belonging to them. Also known as social engineering and impostors. scamsScams A Scam is a confidence trick - a crime -  is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost., email phishing schemes, physical theft of data from individuals or third parties, and from public websites and social media accounts, among other methods. Criminal actors will use third parties or persuade individuals who are victims of other scams or frauds to transfer fraudulent funds to accounts controlled by criminals.

Many victims of identity theftIdentity Theft Identity theft is when someone uses another person's personal identifying information, without their permission, to commit fraud or other crimes. In both the U.K. and the United States it is the theft of personally identifiable information. Identity theft deliberately uses someone else's identity as a method to gain financial advantages or obtain credit and other benefits, and perhaps to cause other person's loss. The person whose identity has been stolen may suffer adverse consequences, especially if they are falsely held responsible for the perpetrator's actions. Personally identifiable information generally includes a person's name, date of birth, social security number, driver's license number, bank account or credit card numbers, PINs, electronic signatures, fingerprints, passwords, or any other information that can be used to access a person's financial resources. related to unemployment insurance claims do not know they have been targeted until they try to file a claim for unemployment insurance benefits, receive a notification from the state unemployment insurance agency, receive an IRSIRS The Internal Revenue Service (IRS) is the revenue & tax service of the United States federal government responsible for collecting taxes and administering the Internal Revenue Code (the main body of federal statutory tax law.) It is part of the Department of the Treasury and led by the Commissioner of Internal Revenue, who is appointed to a five-year term by the President of the United States. The duties of the IRS include providing tax assistance to taxpayers; pursuing and resolving instances of erroneous or fraudulent tax filings; and overseeing various benefits programs. Visit www.IRS.gov to learn more. Form 1099-G showing the benefits collected from unemployment insurance, or get notified by their employer that a claim has been filed while the victim is still employed.

The FBI Advises The Public To Be On The Lookout For The Following Suspicious Activities:

• Receiving communications regarding unemployment insurance forms when you have not applied for unemployment benefits
• Unauthorized transactions on your bank or credit card statements related to unemployment benefits
• Any fees involved in filing or qualifying for unemployment insurance
• Unsolicited inquires related to unemployment benefits
• Fictitious websites and social media pages mimicking those of government agencies

Tips On How To Protect Yourself:

• Be wary of telephone calls and text messages, letters, websites, or emails that require you to provide your personal information or other sensitive information, especially birth dates and Social Security numbers. Be cautious with attachments and embedded links within email, especially from an unknown email sender.
• Make yourself aware of methods fraudsters are using to obtain PII and how to combat them by following security tips issued by the Cybersecurity and Infrastructure Security AgencyCybersecurity and Infrastructure Security Agency The Cybersecurity and Infrastructure Security Agency (CISA) is a standalone United States federal agency, an operational component under Department of Homeland Security (DHS) oversight. Its activities are a continuation of the National Protection and Programs Directorate (NPPD). CISA was established on November 16, 2018 when President Donald Trump signed into law the Cybersecurity and Infrastructure Security Agency Act of 2018., including:
  • Avoiding Social EngineeringSocial Engineering Social engineering is the psychological manipulation of people into performing actions or divulging confidential information. It is used as a type of confidence trick for the purpose of information gathering, fraud, or system access, it differs from a traditional "con" in that it is often one of many steps in a more complex fraud scheme. It has also been defined as "any act that influences a person to take any action that may or may not be in their best interests." and Phishing Attacks
  • Protecting Against Malicious Code
  • Preventing and Responding to Identity Theft
• Monitor your bank accounts on a regular basis and request your credit report at least once a year to look for any fraudulent activity. If you believe you are a victim, review your credit report more frequently.
• Immediately report unauthorized transactions to your financial institution or credit card provider.
• If you suspect you are a victim, immediately contact the three major credit bureaus to place a fraud alert on your credit records. Additionally, notify the Internal Revenue Service by filing an Identity Theft Affidavit (IRS Form 14039) through irs.gov or identitytheft.gov.

If you believe you have been a victim of identity theft related to fraudulent unemployment insurance claims, report the fraud to law enforcement, state unemployment insurance agencies, the IRS, credit bureaus, and your employer’s human resources department. The FBI encourages victims to report fraudulent or any suspicious activities to the Internet Crime Complaint Center at ic3.gov. You may consult identitytheft.gov for help in reporting and recovering from identity theft.

U.S. Secret Services ties explosion in Unemployment Fraud to Nigerian criminal cartelCartel A scamming cartel is any criminal organization with the intention of engaging in larger-scale financial fraud operations. They range from loosely managed agreements among various scammer gangs to formalized commercial enterprises. The term was applied when the largest scammer gangs organizations reached a size and scope of a major enterprise, including control of corrupt politicians and local officials. In truth, most scammer cartels do not exactly meet the definition of a cartel, but the term stuck and it is now popularly used to refer to any large criminal fraud organization.!

A well-organized Nigerian crime ring is exploiting the COVID-19 crisis by committing large-scale fraud against multiple state unemployment insurance programs, with potential losses in the hundreds of millions of dollars, according to a new alert issued by the U.S. Secret Service.

 “a substantial amount of the fraudulent benefits submitted have used PII from first responders, government personnel and school employees.”

“It is assumed the fraud ring behind this possesses a substantial PII database to submit the volume of applicationsApplications Applications or Apps An application (software), commonly referred to as an ‘app’ is a program on a computer, tablet, mobile phone or device. Apps are designed for specific tasks, including checking the weather, accessing the internet, looking at photos, playing media, mobile banking, etc. Many apps can access the internet if needed and can be downloaded (used) either for a price or for free. Apps are a major point of vulnerability on all devices. Some are designed to be malicious, such as logging keystrokes or activity, and others can even transport malware. Always be careful about any app you are thinking about installing. observed thus far,” the Secret Service warned. “The primary state targeted so far is Washington, although there is also evidence of attacks in North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida.”

The Secret Service indicates that the fraud network is believed to consist of hundred of “mules,” a term used to describe willing or unwitting individuals who are recruited to help launder the proceeds of fraudulent financial transactions.

“In the state of Washington, individuals residing out-of-state are receiving multiple ACH deposits from the State of Washington Unemployment Benefits Program, all in different individuals’ names with no connection to the account holder”.

The Secret Service suggests the crime ring is operating in much the same way as crooks who specialize in filing fraudulent income tax refund requests with the states and the U.S. Internal Revenue Service (IRS), a problem that costs the states and the U.S. Treasury hundreds of millions of dollars in revenue each year.

In those schemes, the scammers typically recruit people — often victims of online romance scams or those who also are out of work and looking for any source of income — to receive direct deposits from the fraudulent transactions, and then forward the bulk of the illicitillicit Illicit means something that is not legally permitted or authorized under the law; unlicensed; unlawful. It can also mean disapproved of or not permitted for moral or ethical reasons. funds to the perpetrators.