Maryland officials have uncovered a “massive, sophisticated criminal enterprise” that attempted to steal $501 million in unemployment insurance from the state, Gov. Lawrence J. Hogan Jr. (R) said during a Wednesday afternoon news conference.
Officials blocked payment to more than 47,500 fraudulent unemployment insurance claims after noticing an unusual increase in out-of-state claims, Maryland Labor Secretary Tiffany Robinson said. Hogan said the operation involved widespread identity theft using information acquired from previous national data breaches.
Details on the investigation were limited, but Hogan said the fraud attempts were recently discovered and shut down. State officials immediately alerted federal law enforcement authorities.
“This criminal enterprise seeking to seek advantage of a global pandemic, to steal hundreds of millions, perhaps billions of dollars from taxpayers, is despicable,” Hogan said.
Hogan emphasized that Maryland’s unemployment insurance data hasn’t been breached, and said claimants’ data hasn’t been compromised. He said the state is working with federal officials, who have uncovered similar attempts at fraud across the country.
A small number of legitimate out-of-state claimants had their accounts frozen as officials investigated the fraud, Hogan said, but will soon get the benefits they need. Coronavirus-related business shutdowns have led to a surge of layoffs and an unprecedented number of unemployment insurance claims this year.
Robinson told lawmakers during a Tuesday afternoon hearing that the state was months away from modernizing its unemployment insurance system when the pandemic hit, and added that officials plan to roll out an updated system later this year.
The state doled out more than $3 billion in regular and emergency federal unemployment insurance benefits between March 9 and June 27, Robinson previously told lawmakers. The state’s Department of Labor received 624,978 complete claims during that time and more than 96% of those have been processed. About 78% of processed claims have been approved, she said.
Hogan said unemployment insurance fraud has surged across the United States since the pandemic began. He said the massive amount of fraudulent claims appear to be coordinated from a “huge cache” of stolen identities.
“This is not just random people in their basement that stole somebody’s identity,” Hogans said. “It’s a large, sophisticated criminal enterprise.”
Federal law enforcement authorities vowed to bring the criminals to justice.
“My office and the entire law enforcement community are committed to bringing to justice fraudsters who are preying on citizens during this unprecedented public health crisis by using their stolen personal information to fraudulently attempt to obtain unemployment benefits,” Robert K. Hur, the U.S. attorney for Maryland, said in a statement.
State officials told Marylanders that if they believe their information has been used to fraudulently file an unemployment insurance claim, they should contact the Maryland Department of Labor’s Division of Unemployment Insurance by visiting MDunemployment.com or emailing [email protected]. Suspected unemployment insurance fraud can also be reported to the DOL-OIG Hotline by visiting www.oig.dol.gov/hotline.htm or calling 1-800-347-3756.
Marylanders who think someone is using their personal information to open accounts, file taxes or make purchases should visit https://www.identitytheft.gov to report and recover from identity theft. For more information about COVID-19 fraud, visit the Justice Department’s website at https://www.justice.gov/coronavirus.