Assignment
From the 5 most scandalous cases of 2021:
01/COVID-19 unemployment insurance fraud is an international affair
They used bots or teams of low-wage workers to complete online forms and file phony unemployment claims in all 50 U.S. states. An international collection of fraudsters raked in billions in pandemic unemployment relief funds to commit what U.S. prosecutors say could be the biggest wave of fraud in U.S. history. The Office of Inspector General for the U.S. Department of Labor (DOL) estimates about $87 billion in fraudulent claims; some experts think losses could be in the hundreds of billions. (See "How Unemployment Insurance Fraud Exploded During the Pandemic," by Cezary Podkul, ProPublica, July 26, 2021, and " 'Easy Money': How international scam artists pulled off an epic theft of Covid benefits," by Ken Dilanian, Kit Ramgopal and Chloe Atkins, NBC News, Aug. 15, 2021.)
In July, ProPublica published a staggering report revealing that organized crime in the U.S. and abroad was responsible for most U.S. COVID-19 unemployment insurance fraud. Fraudsters filed high volumes of online unemployment applications and obtained payments from multiple states, utilizing bots to automatically populate forms with stolen identities. Chinese and West African crime syndicates hired low-wage workers in various countries to input stolen data into unemployment portals. One U.S. state received claims from IP addresses in nearly 170 countries, according to the report.
Criminals on messaging apps such as Telegram shared tips on gaming online unemployment systems. They also exchanged stolen personally identifiable information (PII) and provided step-by-step instructions for filling out online applications without triggering anti-fraud software.
Many people only realized they were victimized after their payments ceased and their state's labor department informed them a claim with their PII had been filed in another state. Tens of thousands of people experienced delays in receiving unemployment relief, and some were even victimized more than once, as multiple fraudsters used stolen PII many times.
Because of the urgency to get money to people, many states weren't verifying information thoroughly. They relaxed rules for obtaining unemployment funds and expanded aid to contractors and gig workers who couldn't readily confirm employer or income information. Further complicating the verification process was that fraudsters were using real PII from real people. Much of the PII fraudsters used in unemployment frauds came from past cyberattacks against corporations such as Experian, Yahoo, LinkedIn and Facebook.
Out-of-date online unemployment systems also heightened the most scandalous fraud of 2021. Many states were running their systems with obsolete software unable to withstand the surge of claims. Databases often froze or slowed, impeding unemployment departments' abilities to cross-check information. According to NBC News, the DOL's inspector general said that states failed to take basic measures to improve identity verification and that state workforce agencies weren't sharing fraud data as required by federal regulators. (See " 'Easy Money': How international scam artists pulled off an epic theft of Covid benefits.")
• Considering the facts stated above, knowledge of the COVID-19 pandemic impacts and the fraud triangle. Discuss each of the following with a paragraph:
1. What pressures did the fraud perpetrator feel in this case ?
2. What opportunity existed that made it possible for the fraud to occur?
3. How did the perpetrator rationalize his/her crime?