Cheney hit with unemployment fraud

CHENEY – A financial fraud apparently launched in Africa has found its way to the West Plains.

According to police, so far at least 18 incidents have been reported of an unemployment scam authorities are calling very sophisticated, immense and seemly targeted at Washington state, although other states have also been impacted. While fraud, Cheney is classifying the incidents as identity theft.

“We chose to classify them as identity theft because the victims’ names and social security numbers were used in an attempt to obtain fraudulent unemployment benefits, which meets the elements of the RCW for identity theft,” Cheney police Sgt. Nate Conley said.

According to a May 16 New York Times story, the attackers have detailed information about U.S. citizens, including social security numbers, that were likely gained in previous cyber hacking schemes. The information is then used to file unemployment claims on behalf of individuals who have not been laid off — coming as an obvious surprise to some who were then contacted by the government later on.

U.S. Secret Service investigators have information suggesting the fraud is originating from a “well-financed” ring in Nigeria. Officials at Washington’s Employment Security Department (ESD) began suspecting something was up several days ago when people who were still employed began calling the department asking why they were receiving employment confirmation paperwork.

U.S. official suspect the fraud has resulted in the potential loss of “millions” of dollars. To get unemployment benefits to individuals laid off due to the coronavirus pandemic, employment offices have taken measures to speed up the payment process, including sending money to direct-deposit accounts.

According to ESD’s website, there over 1.67 million total claims for all unemployment categories during the week of May 10-16, an increase of 369,016 from the previous week. The department out over $1.01 billion, an increase of almost $256 million from the previous week) for 565,764 individual claims, an increase of 28,450 from the previous week.

“ESD believes some portion of the high numbers from the past week are due to an increase in fraudulent claims and is looking into how best to correct for that in future reporting cycles,” the department wrote. “As part of our effort to combat the dramatic increase in applications for fraudulent benefits, some current customers who have applied for, and are receiving, unemployment benefits will need to verify or provide certain information.”

The state has also enacted a two-day delay in payments to allow employees to vet claims.

Roy Dotson, a Security Service agent interviewed for the Times story who specializes in financial fraud, said the perpetrators are being aided in the United States by “mules,” people used as intermediaries for money laundering who have made contact with the fraudsters online. While Washington appears to be the primary target, there is evidence of similar fraud in Florida, Massachusetts, North Carolina, Oklahoma, Rhode Island and Wyoming.

In Bellingham, Wash., reports indicate that more than 400 out of about 2,500 total employees at Western Washington University have been targeted by these claims. Federal investigators are collecting information in an attempt to identify who is involved and locate where they are.

“We are taking reports from anyone that lives in Cheney as part of the documentation procedure,” Conley said. “Any investigation will occur on a federal level.”

Editor's note: This story was updated at 2:09 p.m. May 21 to reflect an increase in cases reported from Cheney police. Originally there were nine but as of this time there are 18.

John McCallum can be reached at [email protected].