A new report from ID.me, a fraud prevention service, reported that fraudsters might have managed to loot up to half of the unemployment benefits the United States handed out as an emergency measure to safeguard the economy during the pandemic caused by the Chinese Communist Party (CCP) Virus.
Blake Hall, executive director of ID.me, told Axios that fraudsters might have looted as much as half of the unemployment benefits, the report claims. That would amount to approximately $400 billion in fraudulent claims.
On the other hand, Haywood Talcove, CEO of LexisNexis Risk Solutions, a large firm with more than 6,000 employees dedicated to fraud prevention and data analysis, estimated that most of the stolen money, about 70 percent, probably ended up outside the United States.
If Talcove’s assertion is true, the situation is even more serious, given that not only those who really needed the money were not able to get it, but also that it did not even serve to circulate it in the country and help reactivate the economy.
As reported by Talcove, much of this money was undoubtedly left in the hands of criminal organizations in China, Nigeria, Russia, and some other places.
Another large portion of the money would have ended up in the hands of street gangs in the country, which have made up a large portion of the scammers in recent months.
According to the report, some criminal groups may have used some method to steal personal information and then use it to pose as unemployment assistance claimants. But it is also not ruled out that these groups may have tricked legitimate claimants into handing over their personal information without knowing that it would be used for that purpose.
Another possible mechanism could have been to give low-income people debit cards to withdraw money, which would then be transferred abroad, possibly through untraceable cryptocurrencies.
The report claims that the state unemployment systems were not sufficiently prepared to handle the millions of dollars and the extraordinary demands of the supposedly unemployed during the pandemic.
While it is always presumed in these types of cases that a percentage of the hundreds of billions could end up in the hands of people for whom the funds were not actually intended, it appears that this time the situation far exceeded what was imagined.
Before the pandemic, unemployment claims were relatively rare and, in general, the programs were so short-lived that international criminal groups did not see them as a lucrative target.
But in the United States, following pressure from leftist Democrats, unemployment insurance became a constant feature to supposedly keep the economy afloat during the pandemic, even though many times the business sectors protested against the system used because they could not find available employees to work since in many cases they preferred to stay at home and continue collecting unemployment insurance.
This situation, which led to the extension of the unemployment programs, added to the fact that they were often directed by state bureaucrats who were not as quick to take strong measures against criminals as private companies normally do, caused international criminals to concentrate their efforts on oiling the mechanisms for violating security regulations and provoking what could have been one of the most significant massive frauds in history.