State has recovered $300M in stolen unemployment benefit money, ESD official says

State unemployment officials said Thursday they have recovered $300 million in stolen money that was diverted by scammers from jobless workers in dire need of unemployment aid benefit, KOMO News reports. 

Speaking during an online briefing about the agency’s efforts to dispense aid to Washington’s state’s unemployed workers, Employment Security Department Commissioner Suzi LeVine said the agency expects to receive $50 million today as part of its recovery efforts.

“I have some very good news about what we’ve been able to recover,” she said, adding that the effort to reclaim the money involved a “strong collaboration with federal law enforcement, our banks and financial institutions across the United States.”

About two weeks ago, the agency suspended unemployment benefits payments for up to two days because of a rise in the number of fraudulent claims for payment.

The fraud included a scam where criminals, many of them out of state, used stolen information from Washington state residents and third-parties in order to file for unemployment benefits.

Criminals seeking to capitalize on a flood of legitimate unemployment claims are sneaking in fraudulent ones by using stolen personal identifying information.

Last week, state officials officials hinted at the scope of the damage done: hundreds of millions of dollars paid out in fake claims. 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.

Other states have been victims as well and they, along with federal authorities, are trying to claw back as much money as possible. States have also moved to block hundreds of millions more from being paid out, but Washington state’s experience is nevertheless a cautionary tale.

“Our intel says Washington was the first state they went after, but we are seeing the number of states being attacked expand day by day,” said Patrick Peterson, chief executive of the California cyber security firm Agari, which has monitored the Nigerian fraud group, dubbed Scattered Canary.

The Associated Press contributed to this report.

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