Washington State’s Democrat governor Jay Inslee wanted to make it as easy as possible for people to obtain unemployment benefits during the pandemic so he lifted much of the restrictions and safeguards.
The result: the state admits they lost “hundreds of millions” to a Nigerian fraud ring.
The African fraud ring, dubbed “Scattered Canary” began siphoning off the benefits, notably the extra $600 a week Congress had added to unemployment checks in March.
The ring used personal information stolen in past consumer data breaches and 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” according to one state official.
“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...
On May 14, the ESD (state’s Employment Security Department) acknowledged a sharp rise in suspected fraud and abruptly suspended benefits payments for two days. By then it was too late.
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.”
The head of Washington’s Employment Security Department Suzi LeVine says they can’t release specific numbers on how much the state lost to scammers because it’s an ongoing investigation.
Caleb Heimlich, the chair of the Washington State Republican Party, says responsibility for the massive swindle rests with Democrat Gov. Inslee. He says “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.”
As Seattle talk-radio host Jason Rantz says “We don’t know how this scam happened yet. Perhaps LeVine or Inslee got an email from a Nigerian prince seeking help to unlock millions in a real estate investment in Medina.” Rantz adds “If she had a sense of shame, LeVine would have already stepped down. But I guess she doesn’t want to lose a consequence-free, cushy job. She would have to rely on unemployment checks to sustain her, but probably not receive any for a few months.