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Gov. Inslee’s Lax Unemployment Benefits Rules Made Washington Primary Target Of Nigerian Crime Ring

Gov. Inslee’s Lax Unemployment Benefits Rules Made Washington Primary Target Of Nigerian Crime Ring

“hundreds of millions of dollars” down the drain

https://youtu.be/GvFmdnv0FL4

It seems that Democrats are constantly trying to outdo each other on the most ludicrous points—relaxing some laws (opening borders and prisons) and tightening enforcement of their own orders (locking up surfers and hair stylists).

In Washington state, Gov. Jay Inslee (D) rushed to hand out the extra $600/week to anyone and everyone who applied for unemployment, up to and including a Nigerian crime network that funneled out of the state “hundreds of millions of dollars” before Washington officials finally got a clue.

While other states were also targeted, including some red ones, it appears that Washington was the favored piggy bank of a Nigerian crime ring dubbed “Scattered Canary.”

Business Insider reports:

A Secret Service spokesperson confirmed to Business Insider on Monday that the agency’s electronic crimes task force had identified “criminal actors targeting state unemployment insurance program funds” using stolen personal information.

“Criminals will use stolen personally identifiable information … to file fraudulent state unemployment claims. Crooks will then use social engineering techniques to recruit unsuspecting individuals to launder illicitly obtained funds in order to conceal the identity, source and destination,” the spokesperson told Business Insider.

The Secret Service circulated a memo last week warning that the criminals appear to be connected to a Nigerian crime ring and may have already stolen hundreds of millions of dollars, security researcher Brian Krebs first reported. The memo said the fraudsters were primarily targeting the state of Washington, as well as North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming, and Florida.

So why Washington as the primary target?  Well, they were sending out benefits before verifying them with employers, they were depositing in out of state banks (including all the way across the country), they were sending money on the same claim to numerous people who were literally using numerous different names, they ignored other red flags like disposable email addresses, and so on.  It’s mind-boggling.

The Seattle Times reports:

Earlier this spring, as Washington began to pay out enhanced unemployment benefits to tens of thousands of laid-off and furloughed workers, a criminal organization halfway around the world spied an enormous opportunity.

A Nigerian fraud ring, dubbed “Scattered Canary” by security researchers, would soon begin siphoning off the benefits, notably the extra $600 a week Congress had added to unemployment checks.

Hiding behind a tsunami of legitimate claims, and using personal information likely stolen in past consumer data breaches, the ring and other criminals filed thousands of bogus applications with the state’s Employment Security Department (ESD). By the time the fraud was recognized, scammers had made off with “hundreds of millions of dollars,” ESD Commissioner Suzi LeVine acknowledged Thursday.

Exactly how much was carted off by Scattered Canary, as well as other bad actors, hasn’t been determined. But federal and state officials have pointed to sophisticated Nigerian cyber-fraudsters as key players who exploited a once-in-a-generation opportunity, abetted by a chaotic economic crisis and political pressure to swiftly payout checks to distressed workers without the usual scrutiny. Since the start of the pandemic, the state has paid out nearly $3.8 billion in benefits.

It was the “political pressure” that resulted in Washington’s “Employment Security Department” distributing, apparently willy nilly, hundreds of millions of taxpayer dollars to Nigerian fraudsters.

The Seattle Times continues:

Washington’s unemployment system also missed potential red flags, including payments to out-of-state banks and the use of suspicious email accounts, according to security experts. All of that happened despite a $44 million software upgrade at ESD that was supposed to help detect such fraud.

. . . . officials at ESD and at WaTech, the agency that manages the system the state uses to authenticate users for ESD and other state agencies, have repeatedly insisted that when thieves have enough personal information, it’s difficult to stop people from filing fraudulent claims without also obstructing legitimate filers.

The state considered a more stringent authentication system that was included with the upgraded software, but discovered it created headaches for people trying to file claims, and even a less stringent gateway caused “an increased number of phone calls to the agency,” according to a 2017 assessment of the new Unemployment Tax and Benefit system (UTAB).

The net result, it now seems, was an unemployment system that was easier for legitimate users — but also for bad actors, who, once inside, could both file bogus claims and set preferences for how they wanted to be contacted and paid.

. . . .  Washington and other states dropped the usual waiting period between when a claim is filed and paid, so ESD didn’t always have enough time to verify claims before sending payment.

But wait, it gets better.

But experts say that, even before then, there were some clues that should’ve raised alarms about fraud. Some Washingtonians said they found their ESD accounts redirected to an email service called Yopmail, which provides “disposable” email addresses that require no password. Scattered Canary also used so-called “google.dot” accounts, that is, variations of the same Gmail address that can be used to set up a separate ESD account but, which all deliver to a single Gmail email address, according to Agari.

Then there was the payment system. In order to actually receive the fraudulent benefits, Scattered Canary and other groups often use “mules” — people who knowingly or unknowingly help launder money by opening bank accounts or online debit card accounts.

The Secret Service, in its May 14 bulletin, noted Washington had sent automated payments to persons outside the state “all in different individuals’ names with no connection to the account holder.”

The out-of-state bank accounts should have been “a huge red flag” for ESD to scrutinize payments, said the senior fraud officer at an East Coast bank that received at least five electronic deposits from “UI Benefit WA ST.”

“Given our location, we don’t have a lot of people who are employed in the state of Washington,” said the banker, speaking on condition of anonymity to avoid disclosing his bank’s fraud prevention measures.

. . . .  Washington made security choices with its own policy objectives in mind: getting money into the hands of desperate Washingtonians reeling from the sudden loss of jobs and income. To that end, the state erred on the side of distributing benefits first, and asked for employer verification that applicants qualified for unemployment benefits later.

In a statement, Fast Enterprises spokeswoman Megan Mooney said, “Our commercial off-the-shelf software has been implemented as the basis of the UTAB System and it does have fraud detection capabilities. Each agency decides the degree to which those capabilities should be used.”

The numbers are staggering, and you really should read the whole report.  Additionally, legitimate Washington recipients who followed Inslee’s rules are being harassed and threatened as the state scrambles to stem the bleeding.

Employers were receiving notifications from ESD of claims filed in the names of workers still very much employed. Laid-off workers trying to file for unemployment insurance for the first time in their lives found ESD accounts already opened with their Social Security numbers.

. . . .  As more employers and workers began receiving notifications of bogus claims, many tried to contact the ESD. Many could not, and began contacting local police.

Between May 13 and May 18, the King County Sheriff’s Office received 1,668 reports of unemployment fraud — 541 of them on May 18 alone, according to Sgt. Ryan Abbott. In Snohomish County, 911 dispatchers received 1,248 complaints of unemployment fraud last week — compared to three complaints during the first three weeks of April. On the ESD’s online portal for submitting fraud complaints, the numbers were ballooning. Between May 15 and May 20, the number of fraud claims jumped from around 7,000 to nearly 75,000.

. . . . But the biggest victims may be the innumerable Washingtonians who now have had their legitimate and urgently needed claims for jobless benefits delayed as the state tries belatedly to halt the fraud. Others who have already received money say their claims are being investigated for “possible overpayment.”

Seattle resident Silvia Muhammad and her husband were both receiving unemployment benefits when they got ESD notices demanding more verification, or else “he’s going to have to pay back all the money that they’ve given him.”

For his part Inslee points out, quite rightly, that other states were also targeted by unscrupulous scammers, though Washington state Republicans note Inslee’s role in making Washington such an attractive hunting ground.

“It is clear this is not just a Washington state problem,” said a statement from Gov. Jay Inslee’s office Thursday. “This is a national and international criminal conspiracy. We were among the first states hit by these fraudsters but we will not be the last.”

But Caleb Heimlich, chairman of the Washington State Republican Party, said responsibility for the massive swindle rests with Inslee. “No other state was susceptible to this level of fraud. Inslee and his hand-picked department heads continually mismanage our state. All of these failures are Inslee’s to own,” he said in a statement Friday.

[Featured image via YouTube]

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Comments

Years ago I worked for a government agency in Washington state. The stampede to find and promote female and minorities was unbelievable. It was so long ago that almost all of the IS department was male. In this case the county IS department promoted a female whose only experience was working the help desk to be the general manager. She had never written a line of code, not even a “Hello World” program. But, there she was in charge of the whole department.

    notamemberofanyorganizedpolicital in reply to Anchovy. | May 24, 2020 at 7:53 pm

    So if I contact Seattle as a Nigerian princess asking for all the state bank account assess codes…….

    Yipee!!!!!!!!!!!!!

    henrybowman in reply to Anchovy. | May 27, 2020 at 7:11 pm

    Reality apes fiction. “The IT Crowd,” episode 1. Hilarious.

Don’t come asking the rest of us for money, you dumbasses who elect creeps like this guy.

    JusticeDelivered in reply to TheFineReport.com. | May 24, 2020 at 10:43 pm

    Withhold aid until all the pilfered funds have been recovered. I do not understand why we are giving money to any African country, most aid is pilfered, one way or another. It is more or less equal to flushing the money down a toilet.

      Even then: no money till your budget is balanced.

      Look, the truth is this: democrat states are ‘broke’ because money is paid to obscenely overpaid bureaucrats and state union workers in these states. The money is laundered back to democrat politicians running these states.

      Any money we give to these states is in essence money put into democrat campaign coffers.

      Here’s the democrat media ‘spin’, trying to con the rest of us into continuing the scam:

      “The Coming Pension Crisis Is So Big That It’s A Problem For Everyone:”
      https://www.forbes.com/sites/johnmauldin/2019/05/20/the-coming-pension-crisis-is-so-big-that-its-a-problem-for-everyone/#4ccffb6d37fc
      ENOUGH!!!!!

        DaveGinOly in reply to TheFineReport.com. | May 25, 2020 at 2:38 pm

        Actually, Washington state is fairly well run. Road projects are completed on-time, sometimes earlier, and frequently under-budget, workers are largely conscientious and have a sincere desire to help citizens, even the Dept. of Licensing is not the nightmare that it is in other state.

        One probably needs perspective to know this. I’m a native Rhode Islander and RI’s reputation for spending, obstructionist bureaucracy, and lazy and incompetent state workers is well-deserved. My vantage point also allowed me nearly the same view of Massachusetts, NYC, NJ, and Philly (my ex was from NJ, just outside of Philly). Washington state’s Dems can be as loopy (open border, anti-gun, always agitating for an income tax) as any, but the state is run decently, at least. In fact, before the Dems collectively and recently jumped off a cliff, it was difficult to tell whether Dems or Republicans the office of governor during the administrations of three Dem governors in a row (before Inslee – Lowry, Locke, and Gregoire), so innocuous and pragmatic were they.

        Even Inslee is probably not a true progressive, but he’s a true politician who can tell which way the wind is blowing. The wheels have only recently (during Inslee’s administration) started coming off as he has obligingly moved leftward (probably trying to develop street cred for his failed presidential run). So it can now be said definitively that the Dems are beginning to run this state down.

          Andy in reply to DaveGinOly. | May 26, 2020 at 12:14 am

          No it is not well run, there is just more money than brains.

          Two decades of dems “fixing” education and they got sued for under funding it, THEN they took all the local levy money from functional schoools and gave to progressive hell holes that don’t pass levies– in order to make everybody “equal”… then those progressive hell holes gave themselves big fat raises laid off staff as did our local schools who had their money stolen.

          This wasn’t even a real disaster and the ESD system failed miserably before the nigerians- it was always known that ESD would be the point for distributing federal money to contractors and sole proprietors, but they didn’t write a freaking line of code to support that until mid march. They are utterly clueless.

          This is just one of the state’s systems. Another fun fact is the mexicans are coming up here, working for a bit and filing L&I claims and skipping back to mexico to retire on it. So our L&I is not the retirement plan of choice for migrant workers.

There are two other considerations. First, WA has the second highest Unemployment payouts (Max $790/wk – I worked in both WA and OR, guess where I applied when laid off…)

Second, they would retroactively (maybe due to the overload) pay out the WA + the Covid $600 for several weeks in a single deposit – they took a month to add the $600 so they would send out one big deposit.

Another problem is many businesses are closed, so trying to ask them for verification is futile so they don’t even try (with government agencies). At the same time many can’t get through to get their VALID checks (Jason Rantz who has a Seattle based show documented several cases – they still aren’t paid).

    maxmillion in reply to tz. | May 24, 2020 at 11:43 pm

    And it’s been that way forever. I was discharged from the Navy in Seattle in 1973 and my home of record was in Portland, so I could file for unemployment in either state. Washington’s unemployment rate for the very same wage was twice what Oregon was paying.

Next up, Cheat By Mail scammed by Nigerians.

if they tied it to climate change, Inslee might have addressed the problem sooner

If the D’rats can throw the electoral doors open with frauds like universal mail-in voting and eliminate even the most rudimentary checks that votes are valid and legal, the situation would be much like this—and Nigerian scammers may elect the next President.

The governor doesn’t mind.. it wasn’t HIS money.

    guyjones in reply to alaskabob. | May 24, 2020 at 10:15 pm

    My thoughts, exactly Bob. Trust that a Dhimmi-crat apparatchik is never as profligate/cavalier with his/her own money, as they are with spending the taxpayers’ money — there’s always more were that came from.

We ain’t called the “Evergreen $tate” for nothin’.

These Left coast beaurocrats don’t care. It’s not their money. To them, it’s not real, just digits on a ‘putor screen.

I’d write a longer post, but have to get to the airport and pick up my Russian Princess. Lucky me!

healthguyfsu | May 25, 2020 at 1:27 am

This is only the obvious international fraud. I’m sure there’s more waste and fraud from domestic exploitation that hasn’t been caught.

2smartforlibs | May 25, 2020 at 7:24 am

Every time the left has a money give away program something like this happens.

    TX-rifraph in reply to 2smartforlibs. | May 25, 2020 at 10:06 am

    And, the they
    1) Expect somebody else to pay for it
    2) Claim it is fault of somebody else as the leftist had good intentions (that card will be played).

    The Washington voters elected these fools so let the Washington voters pay for the results of their votes. No Federal taxpayer should be forced to subsidize this incompetence. Let the Covid-19 profiteer (Gates) pay for this!

      Andy in reply to TX-rifraph. | May 26, 2020 at 1:36 am

      The real irony is Microsoft has been scamming ESD for decades with their temps. Take a 6 month “break” from your contract so we don’t have to pay you benefits, then cycle in doing the same exact job…for a decade.

Dilbert Deplorable | May 25, 2020 at 10:35 am

Cheat by mail is next. These demidiots are going to fukkkkkk us with cheat by mail.

a Nigerian crime ring
Nah. They’re just illegal aliens undocumented Americans who haven’t made it here yet!

So why Washington as the primary target?
Well, I would say: illegal aliens.
I think most of the states targeted give out things like unemployment to illegal aliens, so there are holes already built-in to their security. They probably already turn a blind eye to stolen SSNs and such.

And, I think the lawmakers and the bureaucrats responsible for this should be required to repay it out of their own pockets over the next, say… 5 years?

    Andy in reply to GWB. | May 26, 2020 at 1:38 am

    as I noted above, Washington’s L&I is the retirement plan of choice for Mexicans. Come up- work, get injured and retire down south.

How many Nigerian Princes can fit on the head of a pin in Seattle?

Just another form of wealth redistribution to the poor oppressed black people.

    Andy in reply to 3525Tex. | May 26, 2020 at 1:41 am

    Inslee is so stupid, he wanted to pay reparations to the ancestors of the ones who sold their countrymen INTO slavery.

SeekingRationalThought | May 25, 2020 at 1:25 pm

Inslee is an idiot. Has a nice ring to it, doesn’t it? Unfortunately, its the truth. Well done Washington voters.

MomInLatteland | May 25, 2020 at 4:58 pm

Unfortunately Washington has been a cheat by mail state for years…found ballots in car trunks are all conveniently for D’s. Those of us who dont vote in lockstep are the minority.

MomInLatteland | May 25, 2020 at 5:04 pm

It was infuriating then and still makes my blood boil! https://www.seattletimes.com/news/150-missing-ballots-found/

Are we sure Nigerians took it and not Washington State employees?

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