Washington recovers $300M in fraudulent unemployment claims

OLYMPIA, Washington (AP) — Washington state has recovered $300 million paid to criminals who used stolen personal information to file fraudulent unemployment benefit claims amid the COVID-19 crisis, officials said Thursday.

Employment Security Department Commissioner Suzi LeVine said that she could not yet reveal the precise amount that was paid in fraudulent claims, but said that the initial recovery — including $50 million set to be returned Thursday — was a result of the state’s collaboration with federal law enforcement and financial institutions across the country.

“This is a national attack by sophisticated criminals and isn’t just happening to Washington state,” LeVine said.

LeVine first detailed the scope of the fraud last week, saying that the information of tens of thousands of people in the state was used to fraudulently pay hundreds of millions of dollars in unemployment benefits.

Much of it apparently went to a West African fraud ring using identities stolen in prior data breaches, such as the massive 2017 Equifax breach. Washington is one of several states where attacks have been detected, including New Mexico, Michigan and Montana, according to California cyber security firm Agari, which has monitored the Nigerian fraud group, dubbed Scattered Canary.

The fraudsters had money sent to prepaid debit cards associated with bank accounts, from which they have it transferred internationally or quickly exchanged for bitcoin or gift cards, according to Patrick Peterson, chief executive of Agari.

LeVine said that the state is recovering additional money from some of the victims of the identity theft who contacted officials after they received debit cards with unemployment benefits they didn’t apply for because the impostor forgot to change the address on the account.

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