Thread by @felixsalmon

I have a story out this morning about the staggering amount of unemployment fraud that has happened over the past year — as much as $400b. A quick 🧵:
axios.com/pandemic-unemp…

First, yes, this data comes from security companies with skin in the game — ID.me and LexisNexis. Also, crime statistics are always fuzzy. There's nothing here that's precise. On the other hand, government sources aren't disputing these numbers.

The big picture is that unemployment fraud has become systematized. It's sold on a SAAS basis on the dark web, and it's operated by very sophisticated international syndicates in Russia, China, Nigeria, and increasingly Romania.

For a long time during the pandemic, states weren't fighting back against this fraud *at all*. They were too busy just trying to get their claims out. To this day, many states still lack the kind of fraud-prevention tools that are necessary.

Do I know for sure that the number is $400b and not $250b? No. But even the lower estimates I've been getting are still enormous — bigger than China's entire national defense budget.

Put yourself in the shoes of a crime syndicate that has worked out how to game the system. You're naturally going to steal as much as you can as fast as you can, before that window closes. What was stopping this? Very, very little.

Just got a quote from @genebsperling about this. "Widespread fraud at the state level in pandemic unemployment insurance during the previous Administration is one of the most serious challenges we inherited…"

“...President Biden has been clear that this type of activity from criminal syndicates is despicable and unacceptable. It is why we passed $2 billion for UI modernizations in the American Rescue Plan."