Since the COVID-19 pandemic began, California's Employment Development Department (EDD) has lost billions of dollars due to fraudulent unemployment claims. According to officials, more than $11 billion of that money has been stolen by a known sophisticated international crime ring.
The organization, headquartered in Nigeria and known to authorities as “Scattered Canary,” has been in operation for years, and many of its members reside in and around West Africa. The fraudulent claims began coming in (and being paid) within days of the expanded unemployment relief programs announced in response to the COVID-19 crisis. The members followed a manual written and distributed on the dark web, which gave instructions on filing fraudulent claims. In many cases, scammers needed only to obtain someone's name, date of birth, address, phone number, and social security number—information easily purchased from hacker databases—in order to file a false claim.
Hurting More than the EDD
In many cases, the fraud hit the pocketbooks of individuals in California, not just the state's unemployment fund. When scammers filed claims under stolen identities of people in genuine need of unemployment, the victims sometimes had their legitimate claims denied. One victim had her EDD account drained of nearly $6000.
Hitting Beyond California
California was just one of the multiple states whose unemployment funds were hit by Scattered Canary. Washington, Maine, Hawaii, Missouri, Oklahoma, and New York are just a handful of the numerous states who have identified fraudulent unemployment claims filed by fraud ring members. More than a year into the scheme, federal authorities are now beginning to identify and arrest specific members of the ring as they have the opportunity. In May, a Nigerian national accused of stealing $350,000 in Washington state unemployment benefits was arrested on allegations of wire fraud at New York's JFK airport as he attempted to flee the country. If convicted, he could face up to 30 years in prison. However, authorities realize his arrest is just the tip of the iceberg, and those who filed false claims from overseas may be very difficult to bring to justice.
Dealing with Unemployment Fraud Charges
While large fraud rings like Scattered Canary are easy enough to identify (and difficult to stop), California is also actively pursuing many fraudulent EDD claims by individuals in the state in an attempt to recover stolen funds. This leaves open the possibility that even innocent citizens may be held suspect for unemployment fraud. If you have been accused of defrauding the EDD, it's important to have a skilled criminal defense attorney fighting on your behalf and defending your rights. At the Sigal Law Group, our team of attorneys has plenty of experience in defending clients against allegations of wire fraud and other forms of unemployment fraud. Call us today at (818) 325-0570 for a free consultation.