Thread by @propublica

Bots filing bogus unemployment claims in bulk.

Teams of fraudsters in foreign countries making phony claims.

Online forums peddling how-to advice on identity theft.

Let's take a look inside the infrastructure of perhaps the largest fraud wave in history (THREAD)

2/ The surge of federal unemployment aid during the pandemic was meant to help out-of-work Americans survive.

But it also attracted countless scammers from around the world looking to make a fortune through fraud.

propublica.org/article/how-un…

3/ All told, state and federal assistance to the jobless during the pandemic could add up to around $1 trillion—and experts fear fraud will eat up HUNDREDS of billions of that.

4/ You might have already heard about the Nigerian government official accused of helping himself to $350K or the Bronx man who allegedly scored $1.5M through UI fraud (both of whom have pleaded not guilty).

5/ But we found the problem extends far beyond a plague of solo scammers...

6/ A @ProPublica investigation reveals much of the UI fraud has been organized, enabled by a burgeoning online community, & largely geared toward exploiting aging, obsolete state unemployment systems whose weaknesses have long drawn warnings.

7/ Communities sprouted up on Telegram and other apps, where fraudsters trade tips on how to cash in.

Hustlers advertise their techniques—or “sauces”— for filing bogus claims, along with state-specific instructions on how to get around security checks.

8/ The forums are easy to find and proliferated during the pandemic, providing bustling marketplaces for criminals looking to obtain stolen IDs, methods for filing fake jobless claims or other advice.

9/ One Telegram user, dubbed “VerifiedFraud,” recently offered his 1,300 chat room participants a new sauce for Pennsylvania that he said would pay $700/week.

10/ VerifiedFraud also posted a “new month prayer” on July 1, asking God to help his customers: “My prayer is all your sleepless night & day coming to this forum working & praying to God shall come through and Success will locate u.”

11/ VerifiedFraud responded to our questions with: 🙄🙄
15 minutes later, he posted this in his channel:

“Virtually all these wealthy entrepreneurs you see around 90% of them started with something illegal to make enough money to run their business.”

12/ Here's a Telegram post from someone calling themself "King of Cali, touting a video guide and a PDF walk-through of how to game California's system.

13/ To demonstrate that their strategies are successful, many sellers will post photos of cash or screenshots appearing to show UI payments landing in their bank accounts.

14/ One user advertised a Michigan sauce by arranging $20 bills in the shape of the words “TAP IN," along with a screenshot of Michigan’s jobless aid website and the claim that “Michigan still hittin and is payin good money.”

15/ A rep for Michigan’s Unemployment Insurance Agency said it is having success stopping fraudulent payments before they’re made & that “these type of messages amount to false advertising in order to elicit money from those who would steal identities."

16/ Many forum users are concerned about fraud — but only the kind that victimizes them.

17/ They're not worried about defrauding UI systems or other government benefit programs, but about paying for a fraud strategy or stolen identities that won’t work.

18/ For instance, one Telegram forum called “$CAM C3NT£R” promises a “trusted” escrow service for sales of sauces, stolen identities and other services to make sure participants don’t rip each other off while preparing to rip the government off.

19/ The administrator of "$CAM C3NT£R" told ProPublica he’s just trying to stop fraud inside his channel: “lot of fake people around and I’m doing escrow to protect my people.”

20/ Social Security numbers, names and dates of birth are frequently exposed in the forums by sellers wishing to give buyers a taste of what they’ve got.

21/ Telegram didn’t respond to requests for comment. But after our inquiry, 10 of the channels we asked about suddenly went dark, marked with this notice: “This channel can’t be displayed because it violated Telegram’s Terms of Service.”

22/ Beyond the widespread marketing of scam strategies and stolen identities on these forums, organized fraud efforts have used automated bots or low-cost human labor to file bogus claims in bulk.

23/ According to a source, New York State's UI system was attacked by a bot, which was able to repeatedly navigate and complete its application process (the state says it’s “aggressively deploying advanced resources” to fight fraud)

24/ UI claim application patterns also indicate workers in China, Brazil, Bolivia, Mexico & West African nations were hired to input data into U.S. unemployment aid portals, according to cybersecurity firm F5.

25/ These "microworkers" earn pennies per task, creating fake email accounts, filling in applications, solving captchas, and other tasks that help fraudsters file piles of fraudulent UI claims.

26/ How many fake claims? We don’t have a full tally yet. But several states reported getting more initial jobless claims from March-Dec. 2020 than their entire state labor force. And in state after state, the volume of claims far exceeded the number of estimated job losses.

27/ There's much more to this story. Read the whole report from @Cezary here:

propublica.org/article/how-un…

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