Feds: Group got millions in pandemic unemployment fraud

February 18, 2022 GMT

NEW YORK (AP) — Authorities made arrests from New York to Delaware to California Thursday as they rounded up 10 men accused of fraudulently reaping more than $4 million in unemployment benefits during the coronavirus pandemic.

They and others, including an 11th defendant who’s still at large, used more than 800 other people’s identities to file claims in New York, the Brooklyn U.S. attorney’s office said Thursday.

“Unemployment got us workin’ a lot,” quipped a YouTube music video that featured five of the men, according to prosecutors.

Starting shortly after the federal government expanded unemployment benefits in March 2020, the ring filed nearly 1,000 claims to New York’s Labor Department, prosecutors said. According to an indictment, the men used other people’s identities but their own or associates’ addresses to get the benefits sent to them on debit cards, then made cash withdrawals with the cards.

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Eight were arrested in New York City, one in Delaware and one in California.

Unemployment fraud has been a nationwide problem during the pandemic, as benefit applications overwhelmed state unemployment agencies. Criminals were able to buy stolen identity data on the dark web and use it to file a heap of phony claims.

The federal Labor Department has said that about $87 billion in pandemic unemployment benefits could have been paid improperly nationwide, with a significant portion attributable to fraud. An Associated Press review in March 2021 found that estimates ranged from $11 billion in fraudulent payments in California to several hundred thousand dollars in states such as Alaska and Wyoming.