Nigerian fraud ring exploits coronavirus crisis to scam ‘hundreds of millions’ in unemployment benefits from Americans

A Nigerian crime group Scattered Canary is believed to be behind the massive fraud

People facing financial stress waiting for food donations in Brooklyn (EPA)

A Nigerian fraud ring is suspected to have stolen “hundreds of millions of dollars” in unemployment benefits from Washington state as it reels from the economic impact of the coronavirus.

The scammers used stolen personal information to submit tens of thousands of unemployment claims at a time when the system was overloaded with legitimate applications from people who had lost their jobs because of the pandemic.

“I realise that this is a jaw-dropping figure,” Suzi LeVine, commissioner of the state’s Employment Security Department, said on Thursday.

“These are very sophisticated criminals who have pretty robust collections of information on people, and they are activating and monetizing that information,” she told reporters.

The revelation comes a week after the US secret service warned that Washington was the primary target in a “well-organised Nigerian fraud ring exploiting the Covid-19 crisis to commit large-scale fraud against state unemployment insurance programmes.”

The scam also targeted North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida.

Security researchers have speculated that a Nigerian crime group called “Scattered Canary” could be behind the scam. Email security firm Agari said the group had used stolen information such as social security numbers to file fraudulent unemployment claims.

It said the group had been involved with a “wide variety of fraudulent activity against government services over their 10+ year history, including unemployment fraud, social security fraud, disaster relief fraud, and student aid fraud.”

Washington governor Jay Inslee warned that the fraudsters are likely to use the same methods to steal from states across the country.

“It is clear this is not just a Washington state problem. This is a national and international criminal conspiracy. We were among the first states hit by these fraudsters but we will not be the last,” he said in a statement.

More than 38 million Americans have applied for unemployment benefits since lockdown measures were introduced across the country to stop the spread of the coronavirus. In Washington, which was among the worst-hit states and the first to shut down in March, some 1.6 million people applied. Officials said a surge of claims last week could have been fuelled by “imposter fraud” claims. Ms Levine noted that Washington’s comparatively high unemployment benefit of $790 per week — the second highest in the country — made it an attractive target.

As a result of the fraud, she added, many legitimate claims would now be delayed.

“This makes me the most angry, and the most upset — that we need to delay payments to Washingtonians who need the benefits,” she said.

More than 1,000 people have died in Washington state due to the coronavirus.