Nigerian Fraudsters Bilk U.S. Unemployment Funds for Millions

(AP Photo/Lynne Sladky)

It sounds like a bad joke. The Secret Service is investigating a foreign attack on the U.S. unemployment system that has been deluged in recent months with tens of millions of Americans filing claims.


The New York Times is reporting that a Nigerian fraud ring is using the social security numbers and other stolen identity data to file false claims with states for workers that may not have even lost their jobs. The scheme has resulted in millions of dollars being siphoned away.

The illegal activity seems to be centered in Washington state but at least six other states may have been targeted as well.

New York Post:

The ring could end up stealing “hundreds of millions of dollars” from state unemployment departments that have been completely overwhelmed by Americans desperate for a financial lifeline after economies shut down.

Roy Dotson, a special agent at the Secret Service, told TheTimes that investigators were still trying to confirm who was behind the attacks and where exactly they are operating,

”We are actively running down every lead we are getting,” Dotson said.

The Nigerian fraudsters apparently use middlemen in the U.S. as “mules” to collect the cash.

One university in Washington was particularly hard hit.

The Hill:


At Western Washington University in Bellingham, Wash., over 400 out of the roughly 2,500-staff have been targeted with fraudulent claims, the university’s spokesman told the Times.

“This is a gut punch,” Suzi LeVine, the commissioner of Washington State’s Employment Security Department, told the newspaper.

Though Washington state has been the primary victim of the attack, there is evidence that the fraud has occurred in Florida, Massachusetts, North Carolina, Oklahoma, Rhode Island and Wyoming.

These are not a bunch of people claiming to be Nigerian princes bilking old ladies out of their life savings. This is a complex operation involving dozens of people here and around the world. The Secret Service is worried that with money flying out of unemployment offices around the country at a record pace, they’ve just uncovered the tip of the iceberg to this scheme.

Is there anything that could have been done to stop this crime? Ordinarily, yes. Checks and balances in the system would have tagged the claims as possibly fraudulent almost immediately.


But with 36 million people filing unemployment claims in the last three months, no system could have possibly prevented this kind of sophisticated attack. Real social security numbers are used and, apparently, citizens of specific states were targeted. Authorities may have become suspicious of so many out-of-state claims piling up so the fraudsters targeted in-state businesses and employees.

There are tens of millions of social security numbers, drivers licenses, and other personal data for sale every day. Criminal networks use them for all sorts of schemes involving government, including Medicare, Medicaid, social security, the VA — any agency that sends money to the public can be targeted. The cost is in the billions every year.

These criminals have taken full advantage of a crisis and are getting rich off of it.


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