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Experts: 50% of Pandemic Unemployment Money Likely Stolen and Sent to Countries Like China and Russia

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Criminals have had a field day filing fraudulent unemployment claims, some experts say, with much of the money ending up overseas.

Blake Hall, the CEO of, an authentication company, told Axios that over $400 billion has been paid out in fraudulent claims in the United States.

Hall estimated that as much as 50 percent of all unemployment money paid out by the government has been taken by those who had no legal claim to it.

When lockdowns and other coronavirus-related rules were imposed, businesses began to close, throwing millions of Americans out of work. Congress responded with an increase in unemployment benefits. Unemployed Americans claimed those benefits through state unemployment agencies, many of which were unable to handle the spike in applications and experienced significant technical glitches.

“Those benefits have attracted the largest cyber attack in terms of fraud in American history,” Hall said, according to KSND-TV. “The fraud rates that we’re seeing are over 10 times what we usually see at federal agencies.”

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CEO of LexisNexis Risk Solutions Haywood Talcove projected that at least 70 percent of the ill-gotten claims money ended up in the pockets of foreign criminals based in places such as China, Nigeria and Russia, Axios reported.

“These groups are definitely backed by the state,” Talcove said.

Axios noted that street gangs have also capitalized on the opportunity and make up the lion’s share of the rest of the fraud claims.

In speaking about California’s ability to fight fraud, Hall said, “[The Employment Development Department], like many of the other state workforce agencies we work with, are on 1980s technology.”

Is this a lesson about what happens when government spends without thinking?

“We have a duty to sound the alarm bell to say if you’re going to distribute $600, $700 billion in aid, you better make sure you have the right security measures in place.”

“We have been focusing on where the bad guys were, not where they are,” said James Lee, the COO of the Identity Theft Resource Center.

“The whole unemployment fraud situation has been the biggest wakeup call in a decade.”

“Criminals have found ways to get around our authentication and we have got to catch up,” Lee said. “We’ve got to find a better way for people to prove they are who they say they are.”

Identity theft has become a lucrative undertaking due to the huge unemployment benefits payouts available.

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“When you have an identity that can be turned into $20,000 plus, literally every criminal and crime ring in the world is going to target these workforce agencies,” Hall said.

“It’s like having a train full of gold from Fort Knox go out and there’s just no security guards on the cars,” he added. “I’d be surprised if any large state made it out with less than tens of billions of dollars in fraud.”

In one recent case in California, according to KTLA-TV, a couple was accused of collectively filing more than 35 fraudulent claims and netting $600,000.

This article appeared originally on The Western Journal.

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