Internet criminals who have stolen nearly $1.9 billion in federal money intended for unemployed Illinois residents during the COVID-19 pandemic boast online of how they’re still selling stolen personal information and fraudulently obtaining unemployment benefits.
That’s what a Georgia State University professor found recently in the dark corners of the Internet, where he monitors criminals who commit unemployment insurance fraud and other scams against government agencies.
David Maimon, a criminology professor, says he often sees Illinoisans’ credit and debit account numbers for sale online, along with fake Illinois driver’s licenses and advertisements for “tuts” — slang for online tutorials on how to commit fraud.
One user bragged about obtaining $354 weekly unemployment benefits from Illinois in May.
“We see many identities, many bank accounts, many driver’s licenses that are associated with Illinois residents” for sale on the dark web, Maimon says.
Illinois officials — stung by an audit released in June that found flaws in the state’s administration of two federal pandemic unemployment programs — say that, despite the onslaught, now they are ready for the bad guys.
Since the widespread fraud problems of 2020 and 2021, which the Illinois Department of Employment Security blamed on the hurried rollout of federal pandemic aid programs, the state has beefed up its security systems and joined a multistate group that shares information about fraudsters who file for benefits in more than one locale, says Kristin Richards, Gov. J.B Pritzker’s IDES director.
“We have multiple levels of security in place,” Richards says of the new system.
The June report by Auditor General Frank J. Mautino found that, from July 2020 through June 2021, the department experienced “unprecedented” fraud in the federal Pandemic Unemployment Assistance program, which provided up to 39 weeks of temporary unemployment benefits for workers including self-employed and gig workers.
The audit found that about $1.9 billion of the $3.6 billion that was paid through the federal program was lost to scammers, mainly through identity theft.
It said the state lacked adequate information technology controls and had failed to maintain accurate and complete data on people filing claims.
The program, along with another federal program that paid $600 in weekly jobless benefits to those who qualified, expired last September, turning off a major spigot for scammers.
Illinois was one of many states where scammers stole money from the federal programs. Fraud was easier to commit because scammers could lie about being self-employed. Nationally, an estimated $163 billion was lost.
Since then, IDES has switched to new login software that includes “identity proofing,” multi-factor authentication and fraud analytics, Richards says. The department also conducts additional data analysis using Pondera Solutions, a private data company owned by Thompson Reuters, and is working with the National Association of State Workforce Agencies to flag suspicious claim filers operating in more than one state.
Haywood Talcove, chief executive officer of the government business of LexisNexis Risk Solutions and a critic of Illinois’ anti-fraud methods, says Illinois could slash its “improper payments” rate — which, according to the U.S. Department of Labor, averaged 16.65% from July 1, 2018, through June 30, 2021 — to about 5% if it had even stricter controls.
Talcove says having more data in multiple layers could flag, for example, a tiny ranch home that’s being used by a couple dozen claimants. Or a claimant who offers a work history that doesn’t make sense because he was in prison in another state at the time.
“They’re claiming it’s fixed, and I’m telling you, it’s not fixed,” Talcove says of the state’s system.
IDES’ Richards and Adam Ford, chief information security officer for the Illinois Department of Innovation & Technology, say they’re confident, though, that their back-end analytics are strong enough “to scrub all claims for fraudulent characteristics.”
Ford says the new system takes into account many more data points, such as geographic information, device types, IP addresses and more.
But he says people still need to be wary of giving out their personal information, even seemingly innocuous facts requested by quizzes on social media.
“The public generally does not have any idea of how much of their information is out there,” Ford says.
Richards won’t comment on the online post bragging about stealing Illinois unemployment benefits except to say it’s possible the image was stolen from elsewhere online and repurposed by a scammer.
Illinois’ 16.65% improper payments rate for unemployment insurance has been better than some other states, such as Virginia, which has a rate of 38%, Tennessee, with 37%, and Florida, at 35%.
But Illinois has lagged behind states like Hawaii and Utah, which each saw about 5% of their unemployment money flagged as improper payments.
