A stunning half of all unemployment money—up to $400 billion—was stolen by criminals during the COVID pandemic, according to an estimate by personal privacy experts at ID.me. The eye-popping level of theft is even more reason for states to cut off early the $300 in weekly extra federal unemployment money.
Fox Business reported from an interview with ID.me that these billions of dollars—paid for by you and me—are likely ending up in the hands of crime syndicates based in China, Russia, and other foreign countries.
Street gangs in the U.S. are also pocketing pandemic unemployment funds. Most of it is being used for illegal acts like terrorism, and child and drug trafficking. This is roughly 50% of unemployment money, according to ID.me, which uses facial recognition software to verify identities.
As I wrote in our Policy Focus this week, in addition to disenctivizing work, emergency pandemic benefits are fraud magnets, according to a U.S. House Ways and Means Committee minority roundtable titled “$60 Billion and Counting: The Consequences of Unchecked Pandemic Unemployment Fraud.” “In Indiana, my section experienced a 1,500 percent increase in identity theft fraud reports in 2020,” one witness testified. “We are on track to set a new record for 2021.” Another witness with the Identity Theft Resource Center reported a 4,800 percent increase in identity theft for unemployment fraud.