WASHINGTON–Federal officials are investigating what they believe to be a well-organized “Nigerian fraud ring” for fake unemployment claims in Oklahoma and other states.
The Secret Service warned that potential losses could be in the hundreds of millions.
“The primary state targeted so far is Washington, while there is also evidence of attacks in North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida,” the Secret Service said in an alert sent last week to law enforcement officials across the country.
“It is extremely likely every state is vulnerable to this scheme and will be targeted if they have not been already.”
The agency in charge of unemployment benefits in Oklahoma made a change this week in an effort to stop further fraud and to deal with the unprecedented backlog of unprocessed claims.
The Oklahoma Employment Security Commission voted 4-1 at an emergency meeting to turn over control of its information technology services to another state agency.
The emergency meeting came one day after dozens of frustrated Oklahomans protested at the State Capitol about not receiving their Pandemic Unemployment Assistance benefits.
“Where’s the money?” one protest sign read.
The vote puts control of the commission’s information technology services with the Office of Management and Enterprise Services, which already was helping out.
“This streamlines the activities that they’re currently already doing and removes any type of potential roadblocks that we’re getting with the internal IT staff,” said David Ostrowe, the state secretary of digital transformation and administration.
Commissioners may meet again today to discuss further changes.
More than 400,000 claims have been filed in Oklahoma since the pandemic began. Thousands remain unresolved.
The Oklahoma State Bureau of Investigation has created a task force to investigate the fraudulent claims.
“We are hearing from citizens, businesses, municipalities and state agencies that fraudulent unemployment claims are rampant across the state,” Ricky Adams, director of the OSBI, said.
“Not only are Oklahomans having to deal with their identity being stolen, but those that are truly unemployed and have applied for benefits are having their claims slowed down by thousands of fraudulent claims clogging up the system.”
The Secret Service said the Nigerian scammers, apparently, are using a “substantial” database of personal information on individuals to carry out the scheme.
“This fraud network is believed to consist of hundreds, if not thousands, of mules with potential losses in the hundreds of millions of dollars,” the Secret Service said.
Mr. Ostrowe said some fraudulent claims were paid before the Office of Management and Enterprise Services got involved. Since then, he said, $35 million in payments on “highly suspicious” claims were stopped.
“The $35 million never went out the door, Mr. Ostrowe said.
“That was like 86,000 claims and then 21,000 right behind it that we had problems with.”
He credited the fraud prevention to the state’s chief information officer, Jerry Moore, and the state chief information security officer, Matt Singleton.
“They’ve been heavily involved. They’re working hand in hand with OSBI.”