Regular readers of this column know I counseled for years for everyone to pay close attention to your credit card and bank statements. We need to review those line by line. And what we are looking for are card charges we did not make, or withdrawals from accounts we did not authorize. But what happens if during your review of your bank statement, you notice a large unexpected deposit into the account?
According to the Federal Trade Commission in a June blog post, that’s what happened to a lot of folks in the US in recent months. Where did this money come from? Well, it turns out this too is a COVID–related issue.
The pandemic led to large-scale layoffs and unemployment. Depending on what definition of “unemployed” is used, between 20 and 30 million people lost their jobs. So one of the things people do when laid off is file for unemployment benefits. Each state administers its own unemployment system which pays out those benefits.
And here is where criminals saw their opening. Knowing the states would be drowning in unemployment claims, an apparently well-organized criminal network started filing bogus unemployment claims with many US states. They hoped to slip their claims through before the overwhelmed agencies verified the eligibility of the filer.
To file the claims, they used previously collected or stolen personal information. These claims caused benefits to get paid by electronic deposit to thousands of bank accounts across the country. The criminal network already controlled or created the majority of these accounts, but not all of them.
People who received these unexpected deposits might get calls, texts or emails, threatening them to return the money by wiring it, sending cash, or buying gift cards. In this manner, the stolen money can be transferred out of these accounts to the scammers.
In the eyes of the law, this is money laundering.
Many innocent victims first learned of their involvement when they received letters from their state unemployment offices or their employer, or discovered these deposits while reviewing their statements. Such a discovery is not good news. It means someone knew enough of your personal information to successfully fake an unemployment claim.
This is not a small operation. The state of Washington estimates it lost $550 to $650 million by June 2020 to this fraud scheme. Other states likely lost more.
A Clinton woman, who I will name Charlene, found herself neck deep in this money laundering. She maintained a yearlong online relationship with a man who said he lived in California and worked as an actor. Charlene never met or spoke to the man.
In June 2020, $8,500 was deposited into her bank account from the Arizona unemployment benefits agency. Charlene’s boyfriend sent messages saying the money belonged to him. He wanted Charlene to withdraw the funds and send it to him in cash or Home Depot gift cards.
On four successive days, Charlene withdrew the maximum she could, $1000 each day, bought Home Depot cards and sent them to Los Angeles, California. Charlene’s bank became suspicious, locked her account, and contacted me.
As we investigated, we learned that Charlene’s boyfriend earlier persuaded her to quit her job, cash out her retirement of $51,000 and send it in cash through UPS to California. He also persuaded her to accept other money wired to her account, withdraw it and send that in cash to California.
Charlene’s story is a sad account of an innocent person placing their trust in an online love interest, who stole her money, then manipulated her into acting as a money mule, laundering money and getting mixed up in a nationwide fraud scheme.
If you discover you received bogus unemployment benefits, take these steps:
Report the fraud to your employer. Make a record of your contact.
Report the fraud to the state unemployment agency sending the benefits. Do this online if at all possible. Keep a record of your contact.
Make a police report. This is identity theft.
Review your credit reports. This is free through www.annualcreditreport.com
Consider a fraud alert or credit freeze with the credit reporting agencies
CONTACT SENIORS VS. CRIME
Let me know about scams, fraud, or other crookedness you run across. Most of what I learn, I learn from you.