Secret Service Warns of Nigerian Crime Ring
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The Secret Service is searching for a Nigerian crime ring responsible for widespread unemployment benefit fraud.
They suspect the scammers stockpile stolen identity information, then use that information to trick state unemployment insurance programs. They estimate that the scammers have stolen hundreds of millions of dollars meant to help workers who lost their jobs during the pandemic.
Krebs On Security broke the news after accessing a memo sent to Secret Service field offices. The memo detailed how the scammers used large blocks of stolen personally identifiable information (PII) such as Social Security numbers to defraud state agencies.
Even worse, the scammers specifically used information stolen from first responders, teachers, and government employees. It’s possible that the stolen information is linked to the coronavirus phishing scam targeting similar groups. That scam involved sending fake coupons to government and hospital employees, as well as others, in order to steal their personal details.
The unemployment benefit scam has hit Washington State the hardest. However, the Secret Service memo warned that North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida also experienced attacks.
“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 warned field agents.
Unemployment insurance agencies are some of the most vulnerable government offices right now. Many of them are using outdated software that hackers can exploit. Others lack the ability to weed out fraud through automatic alerts. For example, most state-level systems will allow scammers to register for unemployment benefits under multiple names with the same bank account or email address. That’s something that should be easy to catch, yet the systems simply aren’t capable.
With a record number of people out of work, many states are completely overwhelmed by new applications for unemployment benefits. Unfortunately, the spike in fake claims is causing delays and shutdowns for people who are legitimately in need.
In Washington, the state suspended unemployment payments for two days. They discovered more than $1.6 million went to fake claimants. The state’s Employment Security Department told The Seattle Times that fake claims increased by 2700% during the pandemic.
Washington is currently struggling to help out the 30% of the population without jobs. However, the scammers won’t stop their attacks as long as they can still target vulnerable systems.
“It is extremely likely every state is vulnerable to this scheme and will be targeted if they have not been already,” the Secret Service warned.