Cybercriminals based everywhere from Nigeria to London have pocketed an estimated $8 billion meant for people forced out of work due to the coronavirus so far.
The Secret Service and Labor Department have been warning states for months that criminal networks are trying to steal billions of dollars in federal pandemic unemployment aid. But the overburdened and antiquated state systems that send out the checks have been unable to stop a lot of the fraud.
“We're fighting this fight with '70s era technology with some modern Band-Aids put on top of it,” Ryan Wright, Kansas’ acting secretary of Labor, said in an interview. “I would like to have seen a more aggressive response from the federal government." State officials are seeing big surges in unemployment applications indicating that criminals are trying to game the system. And while they have been successful at blocking some of the theft attempts, the sheer scale is making it difficult to stop entirely.
When the economy was booming from mid-2018 to 2019, the Labor Department estimated that 3.2 percent of the payments made in unemployment compensation programs ended up in the hands of criminals.
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