U.S. Secret Service Announces "Massive Fraud" Against State Unemployment Insurance Programs

Recently, the U.S. Secret Service circulated an information alert to its field offices describing a Nigerian crime ring committing large-scale fraud against multiple state unemployment insurance offices.

The crime ring is submitting fraudulent state unemployment claims on behalf of U.S. citizens who have not been laid off.

States targeted include Washington state, North Caroline, Massachusetts, Rhode Island, Oklahoma, Wyoming, and Florida; however, every state is vulnerable to the attack.

Here is how the fraud is happening:

After the false unemployment insurance claims have been submitted, the money collected is then laundered through a large network of individuals recruited to help launder the proceeds of fraudulent financial transactions; following the steps below:

1. The criminal submits a fraudulent unemployment claim and requests checks to be deposited into accounts that have no connection to the individual in which the claim is being filed for.
2. As soon as checks are deposited, the account holder completes transactions to launder the money elsewhere. This can include making Person-to-Person (P2P) payments, transactions to other accounts, cash withdrawals or purchases for gift cards.
3. Step 2 is repeated multiple times until the bulk sum reaches its final destination.

According to the security and news information website Krebs on Security, the Secret Service memo suggests the crime ring is operating in much the same way as crooks who specialize in filing fraudulent income tax refund requests with states and the Internal Revenue Service, which costs the U.S. Treasury hundreds of millions in revenue annually.

All levels of financial institutions have been targeted during this recent scam, including local banks, credit unions, and large national banks.

Please closely monitor your accounts; if you suspect anything unusual or see unauthorized transactions, call Nusenda immediately at 505-889-7755 (800-347-2838 outside the Albuquerque area).

Nusenda Credit Union strives to protect member information and occasionally chooses to block or close accounts if that is in their best interest. Members should review their statements to confirm that listed transactions are valid via Internet Banking or the Mobile Banking App.

For more information on how we protect member financial information, visit our Account Security page.