December 22, 2023

Tens of billions of dollars have been swept away during the past 2 by scammers who impersonated people to get their federal Covid-19 benefits. The FBI discovered some of the authors who managed to pull off successful scams in what was qualified as a massive cyber fraud targeting U.S. government benefits.

What many of the fraudsters had in common was foreign nationality. FBI’s efforts revealed that scammers and hackers from Nigeria, China, and Russia were among the authors. However domestic fraudsters were also involved in similar schemes. Once they got the information they needed such as names, addresses, bank cards, and tax information, scammers impersonated these people and successfully managed to apply for and obtain pandemic benefits.

An example of a scammer who eventually got caught was Abedemi Rufai. He was a Nigerian state government official who managed to make dozens of fake unemployment claims in several states and get as much as $350,000.

Most scammers who pulled off similar tricks tried to transfer the illicit funds obtained from Covid benefits abroad. One of the most targeted programs that enabled fraudsters to make lots of money over the internet was the unemployment program. The U.S government supported people who lost their jobs because of the Pandemic and offered them money as unemployment relief.

At the moment, it is still unknown how much scammers have managed to steal from those funds. One thing is for sure, however, the Covid-19 unemployment relief amounted to more than $900 billion. It is estimated that cybercriminals could have stolen anywhere between $87 billion and $400 billion.

Tech-savvy Criminals

It was relatively easy for tech-savvy criminals to seize some of these funds due to the rapid pace at which the relief program unraveled. Because U.S. citizens who became jobless needed cash urgently, the government decided to ease access to the money. The application process was simplified as much as possible with the entire procedure taking place exclusively online.

This was precisely the factor that enabled criminals to access the benefits. Since no in-person evaluation was required, everything cybercriminals needed was already online. They just had to find ways to hack into people’s accounts to access their IDs and other sensitive information.

According to analysts, domestic and foreign criminals were able to trick the system so quickly because of its vulnerabilities. The unemployment verification process already had its faults even before the pandemic. Since states tried to help their cities access the much-needed money fast, the security measures implemented as part of the online application process were not exhaustive.

Furthermore, the government even granted several benefits to gig workers and contractors who didn’t even have to go through an employer verification stage. Another factor that facilitated hackers’ job was the massive amount of personal information available online. Some of them didn’t have to struggle to get into people’s computers by having them install spyware or establishing some sort of remote connection to their victims’ devices. All they had to do was pay the right amount of money to the right people on the dark web.

Social And Professional Platform

With so many social and professional platforms where people create user accounts and use their personal data, there is a lot of private information ill-intentioned people have managed to gather in time. Hacks on major platforms such as Yahoo or LinkedIn have only proved that this data is vulnerable and can be stolen.

According to a Secret Service official, the amount cybercriminals managed to steal thanks to the Pandemic Unemployment Assistance program exceeds the annual cost of ransomware. The magnitude of these frauds, although not yet expressed as a determined amount of loss, is also highlighted by the disparity between unemployment claims and unemployed peopled. In the period ranging between March 2020 and the end of the same year, 2 thirds of the country’s labor force has claimed unemployment benefits. However, statistics showed that the actual unemployment rate was only around 23%. Even with many citizens having lost several jobs during the year, the discrepancy still can’t be explained.

And 2020 was not the only year when scammers thrived by stealing unemployment benefits belonging to U.S. citizens. These online frauds have been proliferating throughout 2021 as well. Only in Maryland, in May and June 2021, authorities found more than half a million fake unemployment claims. Given all these facts, it’s safe to assume that the impact of these scams will only be revealed long after Covid-19 jobless programs will cease.

Courtesy of, Diamond Shield Management.

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