Help for the jobless has also been a bonanza for criminals.
The New York Times: The unemployment insurance system — the main artery for delivering financial assistance to laid-off workers — has been besieged during the coronavirus crisis by fraud schemes aimed at bilking the government out of hundreds of millions of dollars.
Most of the fraud is being engineered by criminals, some of them working together, who have stolen or bought other people’s identities.
The U.S. Labor Department recently made fraud detection a priority, dedicating $100 million to combat the problem. But several state officials and security experts say some of the efforts have been misdirected, designed to uncover workers misrepresenting their eligibility.
“The focus continues to be on lying instead of stealing,” said Suzi LeVine, the commissioner of the Employment Security Department in Washington State. Traditional fraud-prevention strategies, she said, “will not help us catch these thieves.”
In California, fraud has been so pervasive that officials have suspended processing jobless claims for two weeks to put new controls in place and reduce a bulging backlog.
Unemployment insurance has generally not been a ripe target because states have been reducing benefits and tightening access. That changed after Congress moved in March to help workers suddenly left jobless when the coronavirus crisis upended the economy.
Handled by the states, pandemic jobless benefits were meant to cover self-employed, part-time and gig workers; independent contractors; and others ordinarily ineligible for unemployment insurance. But the desire to get money quickly to households facing eviction, hunger or financial ruin made the program vulnerable to swindlers. It depends largely on individuals’ certifying that they are unemployed because of the coronavirus pandemic.
“There is a low barrier to entry for potential scammers and criminals who are interested in getting involved with this form of fraud,” Parker Crucq, a senior threat intelligence analyst at the cybersecurity firm Recorded Future.
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