Half of American unemployment benefits have gone to fraudsters in the past year, a theft that could cost upwards of $400 billion, Axios ‘Felix Salmon’ reports. Even if the real figure is a. Ho third Of that, it’s a scam for the ages and a sign that Congress didn’t think of things when it made jobless payments the central form of COVID relief.
State agencies handling applications for unemployment payments were remotely unprepared: less than 300,000 per week for the entire country before the lockdown began, but exceeded 6 million in the first week of April 2020 and Not less than 1 million till August.
This leads to a drop in security for validating claims. Furthermore, as eligibility was expanded to include self-employment, and independent contracts and benefits were extended indefinitely, it suddenly became far more attractive for fraudsters to pursue.
Salmon’s sources may have underestimated the fraud (the ones that have gone on record are those with companies that sell fraud-prevention services), but it’s certainly true that the filing was far ahead of Wall Street’s expectations. . Furthermore, he reports that unemployment-fraud software is now for sale on the dark web, while one expert suggests that two-thirds of the stolen cash went to foreign crime syndicates based in countries such as China, Nigeria and Russia. Gone.
The question is: can Washington and the state further strengthen ID-verification and eligibility checks to ensure this never happens again?