Federal Investigators Target ‘Fraud Ring’ Attacking State Unemployment Systems

Shutterstock/Joseph Sohm


Connecting state and local government leaders

STATE AND LOCAL ROUNDUP | Local governments buy up thermal scanners … Masks now mandatory in public in Los Angeles … New Jersey could partially furlough 100,000 state employees.

The U.S. Secret Service is investigating a criminal network making fraudulent claims at state unemployment systems that the agency estimates could eventually add up to hundreds of millions of dollars. The primary target so far of what officials described as a “well-organized Nigerian fraud ring” has been Washington state, according to a Secret Service alert cited in multiple media reports. But there also has been evidence of attacks on other states’ systems, including Florida, Rhode Island and Wyoming. The fraudsters are accused of using correct information about people who have jobs—including Social Security numbers—to get payments placed by direct deposit in bank accounts. One Rhode Island official said the fact that the employment information is factual makes ferreting out the false filings very difficult. While pledging to prosecute anybody who files phony claims, U.S. Attorney Brian T. Moran also criticized the state, saying they need to improve their system and “fix vulnerabilities.” Washington state last week temporarily halted unemployment payments after identifying more than $1 million worth of false claims. A top staffer with Gov. Jay Inslee pushed back at Moran’s criticism of the state. “I’m really beside myself trying to understand why a law enforcement official who believes there’s a vulnerability, so far unnamed, wouldn’t tell us what they thought that was and offer to help,” said David Postman, the governor’s chief of staff. [Seattle Times; New York Times; KrebsonSecurity.com]

THERMAL DETECTORS | Local governments and companies have been buying thermal scanners with the ambition to use them to detect if a person has high skin temperatures. But experts caution this technology isn’t actually very good at telling whether somebody is sick with a fever, one of the symptoms people infected with Covid-19 sometimes display. [Washington Post]

MASKS REQUIRED | Los Angeles began a new phase of their reopening last week, allowing all retail businesses to reopen, but only for curbside pickup or delivery if they are not part of the initial group of businesses considered essential. Another new policy will require all residents to wear masks any time they leave their homes, a step up from previous measures that only required them in businesses and on public transportation. Mayor Eric Garcetti said that the changes will allow Angelenos to start returning to life as normal. “Bring your masks with you whenever you leave your home. That will help us get more freedoms,” he said. [KTLA]

ANTI-BDS BILL | The Missouri state legislature passed a bill that will ban the state from contracting with companies that boycott Israel. Some companies participate in the BDS movement, which stands for boycotts, divestment, and sanctions of Israel over what advocates say are human rights abuses of Palestinians in contested areas of the West Bank. The Missouri bill would require companies that contract with the state government to sign a pledge that they will not participate in the BDS movement. Dozens of states have similar laws on the books. [KRCG]

FURLOUGHING GOVERNMENT WORKERS | The New Jersey state legislature approved a plan to partially furlough about 100,000 state and local government workers through the end of July, in response to the coronavirus-induced shutdowns. Gov. Phil Murphy has not said whether or not he will give the final approval. “I think we’ve got to be very careful," Murphy said last week. [NJ.com]

Laura Maggi is the managing editor at Route Fifty. Emma Coleman is the assistant editor at Route Fifty. 

NEXT STORY: In an Attempt to Help Struggling Restaurants, Cities Regulate Food Delivery Apps