COVID: Washington unemployment fraud might be $650 million

OLYMPIA, Wash. (AP) — Washington officials said Thursday they believe they have recovered about half of the hundreds of millions in unemployment benefits paid to criminals who used stolen identities to file claims during the coronavirus pandemic.

Employment Security Department Commissioner Suzi LeVine said officials are still working to determine the final amount paid out fraudulently, but they believe it was between $550 million and $650 million. To date, the state has recovered $333 million, she said.

“We do believe there is still a significant amount we can get back,” she said.

The number of new claims for unemployment benefits in Washington dropped to just over 31,000 last week. LeVine said the drop is in part because of the ongoing anti-fraud efforts and because the economy is restarting under the state’s four-stage reopening plan that is bringing people back to work.

A West African fraud ring using identities stolen in prior data breaches, such as the massive 2017 Equifax breach, is believed to be behind the fraud, which has targeted nearly a dozen states, according to California cybersecurity firm Agari.

LeVine said that of claims that have been held up because of identity concerns, the claims of more than 51,000 people were resolved Wednesday night, and that $77 million in funds will be released to 32,000 people Thursday. The remainder have separate questions about their applications that require additional resolution, she said.

An additional 50,000 claims will take more time to resolve because LeVine said she believed about half of them to be fraudulent.

“The fact that innocent people are caught in a fraud net — which means their payments have been stopped or delayed — is the most infuriating and disheartening part of this effort,” she said.

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