INDIANAPOLIS (WISH) — A representative of the Indiana Attorney General’s Office has told News 8 it’s never seen fraud at this level, thousands of attempts every week to steal unemployment benefits from unwitting victims here in Indiana.
News 8 introduced Terrence Reilly a couple weeks ago; he lost his job and was forced to file for unemployment benefits. Reilly applied and discovered someone in Canada had already used his name and Social Security number to claim benefits. Reilly believes he is one of thousands of victims whose personal information has been bought and sold on the dark web.
Doug Swetnam is the section chief of data privacy and identity theft unit at the Indiana Attorney General’s Office says the pandemic unemployment benefits are a prime target. “No unemployment office had been required to distribute before, so a lot of them were not set up to ask the questions or verify the identity of people in categories like the self-employed, contractors or gig workers, so it made it easier for people to cheat and harder to verify legitimate people.”
The Indiana Attorney General’s Office provided News 8 with a series of screenshots from a dark website listing driver’s license and Social Security numbers for sale to anyone with a credit card. In an effort to stop unemployment fraud, the state government contracted with ID.me to verify the identity of every person filling for benefits. ID.me provides secure identity proofing, authentication, and group-affiliation verification for government and businesses, according to the company’s website.
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“Before COVID, before the pandemic, unemployment saw about a 10% improper payment rate,” said Blake Hall, the chief executive officer of ID.me.
Halls said many states, including Indiana, threw out identity safeguards in the rush to distribute unemployment money during the coronavirus pandemic, which opened the door to fraud. “The federal and state governments suspended a lot of those eligibility requirements and so states were really left handicapped and so the number had to explode.”
ID.me handle’s identity verification for 33 states. The company spotted and reported people who applied for benefits in five or six states at one time. Hall estimated that his company stopped close to $1 billion a week in fraudulent claims across their network.
In Indiana, the Department of Workforce Development estimates 95% of all unresolved claims are fraudulent. The department, though, has not provided exact numbers; however, from publicly available data on its website, from 7,000-10,000 claims each week are fraudulent.
The department would not say how much has been lost to fraud.
Much of the fraud, according to Swetnam at the Attorney General’s Office, is from organized crime. “It is every version of crime, pretty much every thief in the world took an opportunity at the cares act and the subsequent acts. It was like a giant give away to every bad guy out there. So, we have organized crime from foreign countries. We have organized crime from the U.S. We have street gangs that are jumping in. We are seeing all different types,” Swetnam said.
Swetman added that prosecuting unemployment fraud cases is a challenge. He says hundreds of sophisticated bad actors are involved, many in other states or countries.
“How many of those we will be able to gather the evidence sufficient to prosecute … that I don’t know because it was a new type of fraud. They were fairly clever in the way they went about it. Putting a case together in order to prove it in court is going to be a little bit difficult,” Swetnam said.
The U.S. Attorney’s Office of the Southern District of Indiana has four pending indictments unemployment fraud cases. They involve the theft of benefits from other states, but the money was transferred to people living in Indiana.
The FBI says it also is actively investigating fraud in Indiana.