While Washington’s Employment Security Department (ESD) has had to manage more than 1.7 million unemployment benefits claims since the beginning of the coronavirus pandemic, they are also dealing with a massive influx of “imposter fraud,” which is siphoning off state and federal money by the millions.
“This is happening because bad actors have acquired people’s personal information through other data breaches outside of the agency,” ESD Commissioner Suzi LeVine said in a press release. “Criminals then use this information to fraudulently apply for unemployment benefits in someone else’s name. There has been no data breach from ESD’s system.”
According to Lewis County 911 Communications administrator Scott Smitherman, they received 65 reports of unemployment fraud within an eight-day window from May 13-20.
Over last weekend, the Centralia Police Department received nine reports of fraudulent activity related to unemployment benefits, according to Detective John Panco. And at the Chehalis Police Department, they’ve received six complaints in all of May, according to Sergeant Gwen Carroll.
The ESD was unable to provide data specific to Lewis County due to an ongoing investigation into the matter, nor did they provide additional comments beyond those in the press release.
Smitherman said that filing a fraud report with the police is important to have documentation of the crime, but noted that they do not take those reports to the ESD.
Chief Deputy Bruce Kimsey of the Lewis County Sheriff’s Office echoed Smitherman’s comments, saying his department has been rerouting the concerned people calling the sheriff’s office to the ESD’s website.
It is an individual’s responsibility to file a report with the ESD. Those reports can be filed online at esd.wa.gov/unemployment/unemployment-benefits-fraud, or through the fraud hotline at 800-246-9763.
Kimsey said that almost all of the calls reporting fraudulent activity have been identical.
An individual will receive a letter in the mail from the state asking the person to verify if they made an unemployment claim, when in fact, they have not.
He added that some county and city employees have also received the letters.
“We’ve had corrections officers that are working and they’re receiving mail at home that someone did one of these fraudulent unemployment claims, and there is a lot of it that’s going on,” Kimsey said.
According to a New York Times report, Florida, Massachusetts, North Carolina, Oklahoma, Rhode Island and Wyoming have also experienced similar spikes in bogus unemployment claims. Additionally, the U.S. Secret Service said they have information that suggested the scheme was coming from a Nigerian fraud ring and could potentially result in a loss of hundreds of millions of dollars, the New York Times reported.
The ESD has taken several steps to combat the fraud, including holding payments for two days last weekend to validate the authenticity of the claims, hiring more fraud investigators and hiring more staff to answer questions on the fraud hotline.
There will also be changes to the system that could delay payments to new and existing customers, according to the ESD. The changes will require a customer to verify or provide additional information to authenticate the claim and until the ASD verifies or collects the additional information, payment could be withheld.
“We are digging into the scope and scale of the problem and remain committed to transparency and security,” LeVine said in the release. “We will share additional information and actions customers can take soon.”
Meanwhile, Lewis County Sheriff Rob Snaza and Prosecutor Jonathan Meyer issued statements criticizing the state’s actions in a press release Friday.
“Employment Security and the State of Washington has failed to protect the information of its residents. The state has allowed fraudulent registration of Social Security Numbers by people using disposable email addresses,” Meyer said. “The state of Washington under the COVID-19 Emergency Declarations, has created a target-rich environment within a system that has failed to create adequate security controls. It is incumbent on the state of Washington to take the steps necessary to protect the identity of its residents.”
Snaza said law enforcement resources are being taxed by the influx of fraud complaints.
“It appears there have not been adequate verification and protection procedures put in place to prevent this type of fraud from occurring within our state unemployment processes,” he said. “Based on these inadequate procedures, it is necessary for us as the public to take preventative steps in order to protect ourselves.”
They recommended residents protect themselves. By registering at secure.esd.wa.gov/home/, individuals will be notified via e-mail if their Social Security number has been used previously or is associated with another e-mail account. Additionally, it is recommended to sign up for Informed Delivery with the United States Postal Service at https://informeddelivery.usps.com/.