LAS VEGAS (KLAS) — The number of Nevadans who have fallen victim to unemployment fraud continues to grow. While the issue recurs, there are many unanswered questions about how it is happening in the first place.
A lot of people who were notified they applied for unemployment revealed it was news to them. Their identify may have been stolen to apply for unemployment benefits, the fraud was not caught, and the money was paid to a scammer.
Some notable examples include:
- A rapper who made a song bragging about unemployment fraud and was later arrested for the crime
- A mail carrier who prosecutors say was part of a scheme to use addresses on her route to help collect the debit cards
Employment departments are overwhelmed due to job losses from the COVID-19 pandemic, and schemers see an opportunity.
Fraud is so bad that Nevada’s Department of Employment, Training and Rehabilitation (DETR) is still analyzing the numbers to figure out how much money it paid to people who shouldn’t have received it.
“What happened, I think, initially is there was a desire to pay as many legitimate claimants as possible, as fast as possible,” said Mike Schmitt, who runs a Las Vegas IT company.
Schmitt is also on the DETR strike force, a group trying to solve problems at the department, including fraud. He says his team tried to match claimants with Department of Motor Vehicle records. They’re finding alarming patterns and alerting law enforcement.
“We found in one case, 2,000 claimants that shared the same mailing address,” Schmitt shared.
He says the website to apply for benefits is built for convenience, but it also means public access. This is one reason the system didn’t catch many fraudulent applications.
“Everybody can go resister, so nobody had to hack in anything, nobody had to break into anything,” Schmitt explained.
But personal information is being stolen to file fraudulent claims. Elisa Cafferata, who heads DETR, says it’s not happening within the agency.
“What we’re seeing and what other states are seeing is that this is a result of data breaches that have happened to other companies,” she noted, “and the information is out in the dark web, and the criminal activity is certainly concerted.”
The I-Team has been trying to find out more on how the information was stolen in the first place, reaching out to agencies like the FBI and the US Postal Inspection Service, which investigate fraud.
“That’s something we’re still looking into, and I don’t want to comment too soon on that,” said Aaron Rouse, special agent in charge with the FBI’s Las Vegas office.
We asked US Postal Inspector Trevor Hudson how and where fraudsters are stealing information from. He replied:
“We have some speculation, but we don’t have a concrete answer as to where they’re getting that information from.”
We then questioned how you stop fraud if you don’t know where it started.
“That’s a good question, and that I don’t have an answer for,” said Hudson. “But the only thing we can do is preach prevention just for people to check to make sure that they haven’t had unemployment filed in their name, and if they find out that they have, to report it right away.”
The I-Team obtained the numbers for some public employees who have been victims:
- Clark County: 1,120 out of approximately 10,000 employees have been the subjects of fraudulent claims
- City of North Las Vegas: 282
- City of Las Vegas: 568
- City ofHenderson: 615
The county and cities sent us the following statements.
Clark County on the period between July 22 and December 8, 2020:
1,120 Clark County employees have been the subjects of fraudulent claims. We have more than 10,000 employees at the County.
Agencies and companies across the state are all being targeted and we don’t know the source of the perpetrator’s information. (It’s not us.)”
Clark County spokesman
City of North Las Vegas:
We have 282 fraudulent claims. However, since mid-October, we have seen a significant decrease in the number of fraudulent claims being filed. We continue to work with the Attorney General’s office as they investigate the matter.”
City of North Las Vegas spokesman
City of Las Vegas:
The YTD number is 568 city employees.”
City of Las Vegas spokesman
City of Henderson:
The City of Henderson has received 615 fraudulent unemployment claims to date.
The Human Resources Department has provided every affected employee with guidance and resources that include reporting the fraud to DETR; filing reports with the Henderson Police Department, Nevada Attorney General’s Office, Federal Trade Commission and FBI’s Internet Crime Complaint Center; and placing a fraud alert with the three credit reporting agencies.
The City is also providing affected employees with a year of employer-paid credit and identity monitoring services.
The Department of Information Technology has verified that there was no security breach within any system where employees’ personal data was compromised.
City of Henderson spokeswoman
While victims are urged to report fraud to law enforcement and DETR, Cafferata says employers can also play a major role in stopping it.
“We give them a notice that a claim has been filed on an employee, and several times, those employees are still working. So, as soon as they log into their portal and let us know, we can stop payments on those claims, which are clearly being filed by someone who shouldn’t be filing them,” she explained.
One complaint we’ve heard from many viewers is they report fraud to DETR and law enforcement, but they don’t receive a follow up.
The I-Team inquired about this, and the head of DETR says they are so overwhelmed with trying to pay unemployment to Nevadans who should receive it, that they just don’t have time to follow up. But as long as you’ve filed the correct documentation, it should be addressed.
In California, the state’s Employment Development Department (EDD) has implemented a new technology which quickly authenticates legitimate unemployment claims. EDD told the I-Team the ID.me identity verification technology was launched on Oct. 1 at the front end of the department’s application process. Along with authentication, it also helps process claims faster and limit future fraud activity.
For more information on what California is doing to stop unemployment fraud, click here.