The Secret Service is investigating a vast fraud ring of suspected Nigerian hackers who allegedly used bogus unemployment claims to steal hundreds of millions in taxpayer dollars intended to help jobless Americans.
The crime ring is exploiting the coronavirus pandemic and economic crisis by flooding overwhelmed state unemployment offices with bogus claims in the names of Americans who are still working, according to a memo reported by Krebs on Security.
The memo, sent to Secret Service field offices on Thursday, said that 'substantial amount of the fraudulent benefits' have used information stolen from 'first responders, government personnel and school employees.'
Washington state, said to be a magnet for bogus claims, has already had to temporarily halt payment of benefits while it sorts through the surge of fraud, leaving jobless Americans in dire financial straits.
Washington's Employment Security Department suspended payments on Thursday to sort through what it calls 'impostor theft' by sophisticated criminals using stolen Social Security numbers and other personal data to access the state's unemployment insurance system.
The state planned to resume benefits payments on Saturday.
It comes as state unemployment offices have been overwhelmed by record-shattering numbers of claims, with more than 35 million people losing their jobs amid the lockdowns intended to slow the spread of coronavirus.
The bogus claims only make it harder for overtaxed state offices to pay out legitimate claims, at a time when many who lost their jobs months ago have yet to see their legitimate claims filled.