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The state of Washington admitted yesterday that it has lost hundreds of millions of dollars to bogus unemployment claims. This is the latest and biggest example of an increasing number of pandemic-related fraud cases. NPR's Martin Kaste reports the crisis has created ideal conditions for scammers.
MARTIN KASTE, BYLINE: By last weekend, it was already pretty clear that something bad was happening to Washington state's unemployment system. Jevin West is an associate professor at the University of Washington in Seattle.
JEVIN WEST: I get this email from my dean that said, uh-oh, my identity has been stolen. Yours might be, too. You better check.
KASTE: Turns out, somebody was impersonating university faculty members, using their names and Social Security numbers to apply for unemployment benefits. And West found that his ID was being misused this way, too.
WEST: I have colleagues across the university - in the medical school, in the law school. And every single group that I talked to, there was at least some. And in some cases, many had their identities stolen.
KASTE: There have been similar reports from all across Washington, and the state now acknowledges that there have been tens of thousands of bogus unemployment claims in just a few weeks. It's lost hundreds of millions of dollars.
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SUZI LEVINE: I realize that this is a jaw-dropping figure.
KASTE: Yesterday, the state's commissioner for employment security, Suzi LeVine, held a Zoom press conference about what happened. She wouldn't give many details because a team of federal investigators is trying to track down the criminal network behind this and get the money back. But when asked whether the state had been taking enough precautions against this kind of fraud, she pointed to the pandemic and the urgency of the economic crisis.
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LEVINE: It is a balance. How do we balance getting that money out broadly and quickly with clamping down in order to keep out the criminals and the fraudsters?
KASTE: Cybercrime gangs always like it when governments are in a hurry to disperse money, and now there's trillions of dollars in aid flowing out of Congress.
PATRICK PETERSON: The race is on.
KASTE: Patrick Peterson is the founder of an email security company called Agari. It's been monitoring a major West African cybercrime gang, watching as it attacks the unemployment systems of at least eight states.
PETERSON: They're trying to get to the websites to register, to fill in the information, to fill out a claim and get those funds before the people who are actually due them can do so.
KASTE: Experts think the gangs are filling out those claim forms by drawing on the ocean of personal information about us that's been stolen in recent years - for instance, from Equifax in 2017. Eva Velasquez is CEO of the Identity Theft Resource Center, a nonprofit that helps victims. It also tracks data breaches. But she says right now that kind of hacking isn't the priority for these criminals.
EVA VELASQUEZ: We have seen the number of breaches occurring actually fall this quarter, but that's because they're no longer seeking out the data. Now they're trying to monetize it.
KASTE: And they're not going after just government money. There's also been a jump in pandemic-themed scams that target individuals - for instance, fake warnings that you've been exposed to the coronavirus.
VELASQUEZ: They love to be able to use a nugget of truth and then spin their yarn. And now because things are so disorienting, it does tend to put us in a position where we think - well, is that true? I mean, it could be because I never thought this could happen, and I'm living it.
KASTE: And that has some disturbing implications. If scammers pretend to be, say, contact tracers, then how will people respond to a call from real contact tracers? Jevin West, the academic whose identity was stolen at the start of this story, runs the University of Washington's Center for an Informed Public. He happens to study misinformation and disinformation. He calls this pandemic a long-term state of uncertainty.
WEST: And when there's so much uncertainty, you get these knowledge vacuums that sort of attract opportunists and propagandists that are either trying to push some narrative, that are trying to sow confusion, that're trying to just make a buck. And there are lots of people trying to make a buck right now around COVID.
KASTE: Now that his own identity has been used for fraud, West says he's resolved to do more at his center to alert the public to COVID scams and the damage they do to our ability to figure out what's real in an unreal time.
Martin Kaste, NPR News, Seattle.
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