When the pandemic hit, states weren’t prepared for the unprecedented wave of unemployment claims they were about to face.
They all knew fraud was inevitable but decided to get the money out to people who desperately needed it was more important than laboriously making sure all of them were genuine.
On Thursday, the federal government revealed that the amount of money looted from the government treasury through corrupt practices stood at $400 billion.
This is coming as the acting Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ibrahim Magu, said the commission was committed to the recovery of stolen assets for the development of the country.
In fact, the United States Labor Department reported that nearly $90 billion in unemployment benefits alone could have been paid improperly due to fraudulent activities, according to reports.
The Minister of State for Niger Delta Affairs, Festus Keyamo, who made the declaration in Abuja, said the government arrived at the amount through research conducted recently.
The Secret Service says it has over 900 ongoing active criminal investigations into pandemic-related fraud cases. In addition to protecting the president, the Secret Service has responsibility for protecting America’s financial and payment systems from criminal exploitation.
The stolen funds were diverted by fraudsters from the Small Business Administration’s Paycheck Protection Program, the Economic Injury Disaster Loan program, and other federal government programs that were intended to help Americans going through tumultuous financial circumstances.
“Today’s announcement is just the latest example of the critical role the Secret Service plays in rooting out financial fraud to protect our financial infrastructure and economic security,” said Secretary Alejandro Mayorkas. “I am incredibly proud of the Secret Service and their continued dedication to protecting our communities from exploitation.”
The report showed various ways how the claims were able to be stolen, according to Axios:
“Mules” — low-level criminals — are given debit cards and asked to withdraw money from ATMs. That money then gets transferred abroad, often via bitcoin.
Unemployment became where the big money was — and was also being run by bureaucrats who weren’t as quick to crack down on criminals as private companies normally are.
Unemployment fraud is now offered on the dark web on a software-as-a-service basis, much like ransomware. States without fraud-detection services are naturally targeted the most.
Haywood Talcoive, the CEO of LexisNexis Risk Solutions, told Axios that most of the money went to China, Nigeria, Russia, and elsewhere. he also added that the operations were state-sponsored but he offered no evidence of that. But, those countries do this regularly, so it would be within the realm of possibility.
The mules get ATM cards and they draw out the cash and it gets shipped overseas.
One big factor was the $600 extra per week in unemployment benefits, which is now $300. The extra money is what lured organized crime to take advantage of the system.
Normally without the extra money due to the pandemic, organized crime doesn’t bother trying to cheat the system. Just another nail in Biden’s coffin.