MN DEED Reports Recent Increase In Unemployment Benefit Fraud Attempts

Minnesotans are being targeted by sophisticated Nigerian scam networks and other fraud attempts to divert unemployment benefits

Fraud Alert

Minnesotans are being targeted in attempts by criminals to collect fraudulent unemployment benefits, and a number of metro and Greater Minnesota law enforcement agencies are trying to warn residents about the scam. 

According to a recent post by the Shakopee Police Department, the scam involves thieves using stolen social security numbers to file for benefits in other peoples’ names.

The fraud appears to stretch across the state based on the cities and law enforcement agencies that have posted about receiving the fraud reports, including Jackson County, Kandiyohi County, Douglas County, the Rice Police Department, Swift County, Lyon County, Richfield, and the city of Virginia.

Leroy Kieker, a Workforce Development Specialist at the MN Department of Employment and Economic Development (DEED) also posted on Facebook about the fraud. 

Kieker said that DEED is hearing from both employers and employees about unemployment benefit accounts being “highjacked” by thieves and the benefits are being “rerouted” to third-party accounts. 

Jake Loesch, a spokesperson from (DEED) confirmed via email that they have seen an increase in fraud attempts in recent weeks and are aware that some local law enforcement agencies are investigating potential fraudulent activity.

Loesch said the one common way that fraud is discovered is that a person who did not apply for unemployment benefits receives a “determination of benefit account” letter. 

There have been an estimated 5,000 reports of potentially fraudulent filings in the last month one report stated.

According to a cyber security expert, the fraud may be linked to a sophisticated Nigerian cybercriminal organization. 

Crane Hassold, Senior Director of Threat Research at Agari Security, wrote extensively about the scheme on his website in May. Hassold said that in addition to the fraudulent unemployment activity against several states, his company has also found evidence that links the cybercriminal organization, dubbed Scattered Canary, to previous attacks targeting CARES Act Economic Impact Payments, which were meant to provide relief caused by the COVID-19 pandemic. 

Hassold noted that cybercriminals have been quick to exploit the COVID-19 pandemic and that they’ve seen a 3,000 percent increase in phishing attacks since the beginning of February.

The Federal Trade Commission offers tips on its website on how to spot possible unemployment fraud, and DEED’s Loesh urges anyone who suspects that they’ve been a victim of unemployment fraud to report it immediately at: https://www.uimn.org/applicants/needtoknow/fraud/ui-fraud.jsp.

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