WA ESD Enacts New Practices in Wake of Nigerian Scam
June 4, 2020 the Washington Policy Center reported the toll of the Nigerian Unemployment fraud/scam in Washington state had topped $650 million. We still have not received and actual, hard total from the ESD (Employment Security Department).
The Washington State Auditor's office listed the figures they are auditing now at $576 million. Washington Policy reports about $333 million of it was recovered by Federal investigators, who managed to get it before it was done being laundered and left the country.
In the wake of what is believed to be the largest ESD state scam in U.S. history, ESD Director Suzy Levine released a statement about the first audit done by the Washington State Auditors office. She also said that the following practices will be put in place:
- "Standing up a 100-person customer service in-take team to handle reports of fraud.
- Establishing a secure portal for receiving verification information from victims and businesses to more quickly identify fraudulent claims, suspend payments and identify payments to recover.
- Implementing a two-day hold on payments to help investigate fraudulent claims prior to payment, in consultation with McKinsey & Company.
- Enacting emergency rule WAC 192-140-096, to allow suspension of payments suspected to be fraudulent until an investigation can be completed.
- Reallocating resources and increasing staffing for fraud investigations. This includes utilizing what we call surging capacity, to activate hundreds of staff across the agency and the Washington National Guard.
- Repurposing staff for data analytics to detect trends in fraud and improve the discovery process."
Instead of the usual single annual audit of ESD, the Auditor's office is doing a second one because of the scam. The Nigerian based group who committed the fraud is known as "Scattered Canary" is a world-wide group who has been active for a number of years. Multiple sources say WA state was targeted because the scammers noticed security protocols and efforts were lax.
Some of the red flags that were missed included multiple claims being filed in a single household that only had one wage earner; one report said over 70 claims were filed by people living in Oklahoma. The scammers even filed claims using identities of ESD employees, which had been stolen in a previous data breach.
ESD purposefully bypassed a lot of checks and balances in an effort to process as many claims as possible after businesses were shut down by Gov. Inslee.
Inslee and the state said it was an effort to help "Washin-tonians," but critics said it was an election year ploy used to help his efforts to win a third term; even if it meant compromising security.