Some of the recent cases are coming to light when individuals are receiving bank debit cards or paperwork in the mail indicating they were approved for federal pandemic unemployment assistance that they never applied for.
In other instances described by law enforcement officials, victims are learning they have been defrauded when they receive tax forms instructing them that the unemployment benefits they received last year are reportable income — although those individuals were not aware that someone had applied for or received the benefits using their identity. In some cases, multiple individuals from the same organizations — school districts, professional firms or government agencies — were victimized. That, according to law enforcement experts, could be tied to data breaches involving those entities.
Frank, a 71-year-old retired Columbia County, N.Y., man who spoke on condition of anonymity due to privacy concerns, said he received paperwork in the mail on Jan. 22 indicating he had received federal pandemic unemployment insurance benefits. It took several attempts over two days, he said, to be able to reach someone at the state labor department to report the fraud. "When you call the number, there's an eight-minute dissertation," Frank said, explaining that it required him to enter his Social Security number and a PIN number.
"Every time I did, it would say, 'Sorry, there are too many calls — try calling back later.' Finally I did get ahold of somebody. ... I explained it to him and he said, 'There's nothing I can do for you.' That's when he gave me the (state) comptroller's number."
On Jan. 25, Frank received a KeyBank debit card that contained access to the unemployment funds that were retroactive to Dec. 7.
"The government doesn't care," Frank said. "I filed a fraud report through the unemployment office — three fraud reports — and also left a voicemail message, and I haven't heard anything."
He added that he also filed reports with State Police and the Columbia County sheriff's department, as well as reporting the identity theft through the Federal Trade Commission's Identitytheft.gov website, which is where the state labor department has been directing victims.
"Again, I know I'm not the only one, but if I filed four fraud reports you would think that somebody would at least answer the email," he said.
Melanie Carden, a senior assistant district attorney in Onondaga County, said their office saw a spike in unemployment identity theft cases last summer, including multiple victims who were employees of school districts.
"The way we're seeing it around here is that it's generally been big businesses," she said, adding that members of a law firm also reported having their personal information used to apply for unemployment benefits.
Earlier this month, the state Department of Labor announced it had identified more than 425,000 fraudulent unemployment benefit claims during the COVID-19 pandemic. The department touted in its announcement that it had prevented "fraudsters from stealing more than $5.5 billion in benefits" and had referred hundreds of thousands of cases to federal law enforcement authorities.
Still, it's unclear how many identity thefts were not prevented. Since March, the labor department reported paying more than $65 billion to more than 4 million New York residents. Those payments were processed as the department came under fire last year for enormous backlogs in applications. In response, the administration of Gov. Andrew M. Cuomo lowered many of the safeguards for processing state and federal pandemic unemployment applications, according to employees who spoke to the Times Union.
Yet in cases like Frank's, it appears the fraudulent application was processed and cash benefits forwarded to him in the form of a debit card. A spokesman for the labor department declined to respond to written questions about how many fraudulent applications they estimate were processed — including how many victims have reported having had their personal information used to successfully apply for benefits without their knowledge.
"Unemployment fraud is — sadly — a scourge that we have to fight every day, but it is particularly despicable that criminals would use a global pandemic as cover to attempt to defraud our system ... and every day our Office of Special Investigations is working to protect our system from fraud and abuse," state labor department Commissioner Roberta Reardon said in a recent press release. "Our team is using technology, including artificial intelligence and other sophisticated techniques, to identify fraud as quickly as possible and stop these criminals in their tracks."
In the U.S. Justice Department's New York Northern District, which stretches from Kingston to Syracuse, the department announced in November it would temporarily hire an assistant U.S. attorney to exclusively prosecute unemployment identity theft cases for one year. But the position has not been filled and there have been few prosecutions since March and federal officials said those responsible often are overseas, where U.S. prosecutorial options are limited.
One of the only federal cases prosecuted in this region involves a Saratoga County man who was indicted for allegedly applying for unemployment benefits using a false Social Security number. In that case, he used his own name in the application and is not accused of trying to steal someone's identity.
Albany County Sheriff Craig Apple said that employees in his department, as well as in the county Legislature and some local government officials, all have been victimized in unemployment identity theft schemes.
"We're advising everybody to check your credit history. We're forwarding everything on to the Department of Labor, but keep in mind they're completely inundated at this point," he said. "Most of it's coming on the dark web and very hard to trace back. ... We're asking people to monitor their credit and change their passwords if you can; it's about the best you can do right now."
The state labor department has acknowledged that "criminals are using real New Yorkers' identities" to file fraudulent unemployment claims. The agency advised that someone who receives a "monetary determination letter" from the department but that did not apply for unemployment benefits should report the fraud to the department's website.
"It's a massive breach," said Albany County District Attorney David Soares, whose office has fielded complaints from victims. "I think you have individual (law enforcement) agencies that are all being contacted because people are just a bit desperate right now in not having anyone to turn to."
Recently, individuals who were approved for unemployment benefits but are now being told they were ineligible, and must return all or some of the money, are being warned that their failure to pay back the funds could be referred for criminal prosecution.
The Times Union reported last week that the state labor department had distributed more than $114 million in unemployment and federal relief benefits last year to New Yorkers later deemed ineligible to receive the money — most of it between July and December.
The most significant overpayments were logged in the final quarter of 2020, when the state reported more than $68.3 million in those payouts. That's up from $15.5 million during the same quarter in 2019, several months before the pandemic began paralyzing the U.S. economy.
Several attorneys interviewed by the Times Union said they have been contacted by people who have been instructed to repay the funds — including some who said they do not have the funds available.
The surge in ineligible unemployment payments last year were made at a time when labor department workers privately warned the state had lowered its safeguards and was overpaying or approving benefits for people not entitled to receive them. They included some who had not worked in at least 18 months and others who filed unemployment applications in multiple states, the Times Union reported in September.
(c)2021 the Times Union (Albany, N.Y.) Distributed by Tribune Content Agency, LLC.
