Fraud Overwhelms Pandemic-Related Unemployment Programs
COLUMBUS, Ohio (AP) — With the floodgates set to open on another round of unemployment aid, states are being hammered with a new wave of fraud as they scramble to update security systems and block scammers who already have siphoned billions of dollars from pandemic-related jobless programs.
The fraud is fleecing taxpayers, delaying legitimate payments and turning thousands of Americans into unwitting identity theft victims. Many states have failed to adequately safeguard their systems, and a review by The Associated Press finds that some will not even publicly acknowledge the extent of the problem.
The massive sham springs from prior identity theft from banks, credit rating agencies, health care systems and retailers. Fraud perpetrators, sometimes in China, Nigeria or Russia, buy stolen personal identifying information on the dark web and use it to flood state unemployment systems with bogus claims.
The U.S. Justice Department is investigating unemployment fraud by “transnational criminal organizations, sophisticated domestic actors, and individuals across the United States,” said Joshua Stueve, a spokesman for the department’s criminal division.
The Labor Department inspector general’s office estimates that more than $63 billion has been paid out improperly through fraud or errors — roughly 10% of the total amount paid under coronavirus pandemic-related unemployment programs since March.
“We’re all learning that there is an epidemic of fraud,” said U.S. Rep. Kevin Brady of Texas, the ranking Republican on the House’s powerful Ways and Means Committee. Brady said the $63 billion estimate “is larger than the entire budget of the Department of Homeland Security.”
“These are frightening levels of fraud,” he said.
California has been the biggest target, with an estimated $11 billion in fraudulent payments and an additional $19 billion in suspect accounts. Colorado has paid out nearly as much to scammers — an estimated $6.5 billion — as it has to people who filed legitimate unemployment claims.
Other estimates, according to AP reporting across the states, range from several hundred thousand dollars in smaller states such as Alaska and Wyoming to hundreds of millions in more populous states such as Massachusetts and Ohio.
The nationwide fraud has fed on twin vulnerabilities: a flood of jobless benefit applications since the pandemic began that has overwhelmed state unemployment agencies and antiquated benefit systems that are easy prey for crafty and persistent criminals.
In Ohio, weekly first-time unemployment claims have ranged from 17,000 to more than 40,000 during the pandemic. But since late last month, those claims have topped more than 140,000 some weeks, with many of them believed to be fraudulent. The state has paid at least $330 million in fraudulent pandemic unemployment benefit claims.
Trying to catch so many bogus claims delays payouts to Ohioans who are legitimately in need of help. In the Columbus suburb of Upper Arlington, Cynthia Sbertoli was receiving $228 a week after she was laid off in March from her job with a nonprofit that runs high school student exchange programs.
Her benefits were put on hold in January after she informed the state that someone had tried to use her identity in a scam to claim benefits. She thought the problem was resolved but has yet to see a renewal of her benefit checks, which she and her husband use to help pay for a son’s vision and auditory therapy.
“It’s just not a good way to take care of people,” said Sbertoli, 49.
In Indiana, Kentucky and Maryland, officials have said that for certain weeks in the new year at least two-thirds of the claims they received were classified as suspicious due to problems verifying identities. It’s not the first brush with serious fraud for Maryland. In July, officials said they’d discovered a massive criminal enterprise that had stolen more than $500 million in unemployment benefits.
Among states that have been hardest hit are those participating in the Pandemic Unemployment Assistance program adopted by Congress last year. It has been a lifeline for out-of-work freelancers and gig workers who normally don’t qualify for unemployment insurance, but it’s also been a boon for criminals who use stolen identities to make claims. Nearly 800,000 of the 1.4 million claims Ohio has received through this program have been tagged for potential fraud.
Scams have been so widespread that the U.S. Department of Justice is setting aside money to hire more prosecutors. In New York alone, the Department of Labor says it has referred “hundreds of thousands of fraud cases” to federal prosecutors. The state says it has blocked $5.5 billion in fraudulent claims, while New Jersey says it’s prevented $2.5 billion from flowing into the hands of criminals.
Despite those efforts, a government watchdog agency says not enough states are taking the necessary steps to prevent fraud.
In its memo this past week, the U.S. Department of Labor’s Office of Inspector General said that by the end of last year, 22 of the 54 state and territorial workforce agencies were still not following its repeated recommendation to join a data exchange run by the National Association of State Workforce Agencies.
That system is designed to check Social Security numbers used in claims to see if they are being used in multiple states, or are linked to dead people or other scam methods. The office said it had found $5.4 billion in fraudulent payments from March through October.
The biggest chunk of that, $3.5 billion, came through claims that used the same Social Security numbers in multiple states. One number was used on claims in 40 states. Twenty-nine of the states paid those claims, totaling more than $220,000.
“The Department needs to take immediate action and increase its efforts to ensure (states) implement effective controls to mitigate fraud in these high risk areas,” the inspector general warned Labor officials.
The people whose identities are used to claim improper benefits often don’t find out until they receive their tax statements.
Andrew Heidtke received a letter in September from the Wisconsin Department of Workforce Development notifying him that unemployment claims he never applied for were being processed.
“I had no idea what was happening,” said Heidtke, who works as an administrative assistant for an engineering lobbying organization. “I kind of just thought it was spam at first.”
Another victim was 99-year-old Harry Hollingsworth of Strongsville, Ohio. The retired elevator car factory worker received a form in late January showing he had received $3,156 in benefits. Hollingsworth died recently, and his son, Jim Hollingsworth, said the bogus claim created a big hassle.
“It looks like the state, they dropped the ball on this completely,” he said.
In its own survey of state governments, the AP found that many are not publicly disclosing the level of fraud. Some officials expressed concern that providing any information, no matter how general, could provide criminals an opening to exploit their systems further.
President Joe Biden’s administration is pledging to cut down on unemployment fraud even as it tries to extend benefits through September. As part of previous legislation, the administration is sending states $200 million to fight it.
That would be welcome in Virginia, where House Minority Leader Todd Gilbert, a Republican, said the Legislature’s watchdog agency should investigate how the state allowed $40 million in bogus payments through prison inmate-related scams.
“How many desperate people, laid off through no fault of their own, could have been helped with that money?” he asked. “It’s maddening.”
Netflix to charge an additional $8 month for viewers living outside US subscribers’ households
Netflix on Tuesday outlined how it intends to crack down on the rampant sharing of account passwords in the U.S., its latest bid to reel in more subscribers to its video streaming service as its growth slows.
To combat password sharing, Netflix said it will limit U.S. viewership of its programming to people living in the same household. Those who subscribe to Netflix’s standard or premium plans — which cost $15.50 to $20 per month — will be able to allow another person living outside their household to use their password for an additional $8 per month, a $2 discount from the company’s basic plan.
Without providing details how it authenticates subscriber identities or accounts, Netflix assured that everyone living in the same household of a U.S. customer will still be able to stream TV series and movies “wherever they are — at home, on the go, on holiday.” The company based in Los Gatos, California has roughly 70 million U.S. accountholders.
The long-anticipated move, telegraphed by Netflix a year ago, seeks to end a practice that the company allowed to go unchecked for years while its streaming service was attracting subscribers in droves. At that time, management had little incentive to risk riling customers by reining in password sharing.
While Netflix looked the other away, an estimated 100 million people worldwide were getting passwords from family and friends to freeload on Netflix TV series such as “The Crown” and films such as “All Quiet On The Western Front.” Those passwords were funneled through Netflix’s 232.5 million worldwide paying subscribers, who generated the bulk of the company’s $32 billion in revenue last year.
But after a year of lackluster subscriber growth that included its largest customer losses in more than a decade, Netflix is putting its foot down.
Before the crackdown on password sharing, Netflix began introducing features, such as the ability to transfer the profiles set up on subscriber accounts to make it easier for people to retain their viewing histories after they are no longer able to watch shows for free.
Netflix’s effort to force more of its viewers to pay for access to its programming follows the launch of a $7 monthly plan that inserted commercials into its service for the first time. Netflix has picked up an additional 9 million worldwide subscribers since the ad-supported option debuted, although not all of those signed up for the low-priced plan.
Although the new U.S. surcharge for viewers living outside subscribers’ households is less than Netflix’s basic streaming plan, it comes at a time that Americans have been paring their discretionary spending because of high inflation. That inflationary squeeze, combined with more competition from other streaming services, is one of the main reasons Netflix has suffered a slowdown in growth.
Netflix co-CEO Greg Peters acknowledged last month that the crackdown on password sharing is likely to trigger an uptick subscriber cancellations, but expressed confidence the company will be better off in the long run after people adjust to the clampdown.
“We see an initial cancel reaction, and then we build out of that both in terms of membership and revenue as borrowers sign-up for their own Netflix accounts,” Peters assured analysts, citing how the crackdown has unfolded in Canada since February.
Netflix’s shares fell 2% Tuesday to close at $355.99. The stock remain up by about 20% so far this year.
Target removes some LGBTQ merchandise from stores ahead of June Pride month after threats to workers
NEW YORK (AP) — Target is removing certain items from its stores and making other changes to its LGBTQ merchandise nationwide ahead of Pride month, after an intense backlash from some customers including violent confrontations with its workers.
“Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and well-being while at work,” Target said in a statement Tuesday. ”Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior.”
Target declined to say which items it was removing but among the ones that garnered the most attention were “tuck friendly” women’s swimsuits that allow trans women who have not had gender-affirming operations to conceal their private parts. Designs by Abprallen, a London-based company that designs and sells occult- and satanic-themed LGBTQ clothing and accessories, have also created backlash.
The Pride merchandise has been on sale since early May. Pride month is held in June.
Target confirmed that it has moved its Pride merchandise from the front of the stores to the back in some Southern stores after confrontations and backlash from shoppers in those areas.
Target’s Pride month collection has also been the subject of several misleading videos in recent weeks, with social media users falsely claiming the retailer is selling “tuck-friendly” bathing suits designed for kids or in kids’ sizes.
The moves come as beer brand Bud Light is still grappling with a backlash from customers angered by its attempt to broaden its customer base by partnering with transgender influencer Dylan Mulvaney. Bud Light’s parent company said it will triple its marketing spending in the U.S. this summer as it tries to restore sales it lost after the brand partnered with the transgender influencer.
Target and other retailers including Walmart and H&M have been expanding their LGBTQ displays to celebrate Pride month for roughly a decade. This year transgender issues — including gender-affirming health care and participation in sports — have been a divisive topic in state legislatures and the backlash has turned hostile.
Aiyana Mathews’ Success Story Ignites Global Business Pros at GSU’s 8th Global Languages Leadership Meeting
ATLANTA, Ga. (FNN) – Gardner-Mathews Global Management founder and CEO Aiyana Mathews provoked tears of inspiration during her keynote speech at the 8th Annual Global Languages Leadership Meeting (GLLM), hosted by Georgia State University’s Center for Urban Language Teaching and Research (CULTR) last Friday.
CULTR Director Dr. Hakyoon Lee greeted guests and provided an overview about CULTR’s work and priorities. This year’s GLLM was the first in-person event after two consecutive virtual events. FNN News asked her how it felt to finally be in-person again. “I think it’s great,” she said post-event. “It was great to see people I had previously met online during our Zoom meetings. It was great to see our supporters [and] community partners.”
Georgia State University Provost Dr. Nicolle Parsons-Pollard followed Dr. Lee, sharing brief remarks on GSU’s vision going forward and the institution’s excitement to welcome Mathews back as this year’s keynote speaker.
Mathews, who was invited to be this year’s keynote speaker after wowing the CULTR team with her panel discussion appearance the year before, shared her immersive experience in Japan and with Japanese culture Friday, impressing upon the audience the immeasurable value of learning multiple languages, embracing new cultures, and the powerful relationships and opportunities those efforts can create.
Mathews’ presentation spanned her compelling 24-year relationship with Japan, which began with her first landing there as part of an exchange program during her printing technology studies at the Rochester Institute of Technology (RIT). Her experience was actually a first for the institution–no other student had done that specific exchange program before. She also chronicled her experience of connecting with Japanese host Fumiko Takahashi and her family. Fumiko, who was present for Mathews’ presentation Friday, received a standing ovation.
During her 44-slide keynote, Mathews laid out the proof of her passion to connect with people wherever she’s planted. She loved her first experience in Japan so much that she ended up moving back there a second time, working as an assistant language teacher. She worked together with local community partners to create festivals that not only celebrated different cultures, but deepened her relationship with the Japanese people by helping natives expand their global awareness as well. Even upon her return to the U.S., she began fostering relationships within the Japanese community in Atlanta by developing a close bond with former Japanese Consul General George Hisaeda and his wife Midori, as well as connecting with relevant Atlanta-based Japanese organizations.
Mathews did the same in Orlando, Florida, fostering relations with Japanese organizations there and organizing a business matchmaking event at Embry-Riddle Aeronautical University for Japanese companies in the aviation and aerospace industry that wanted to get into Florida’s air and space industry. Her journey involved much more, and she clearly laid out the skills she developed along the way, but a core point resounded over and over again with each project and encounter: mastering other languages is paramount in fostering deep, meaningful connections with other cultures. Mathews wanted the audience to understand that being multilingual goes beyond just getting translator or interpreter jobs. The opportunities are boundless when one chooses to master other languages while coupling relentless diligence with a genuine heart for people, as she has done.
Mathews’ presentation blew the 100 attendees–including CULTR’s leadership–away. “I think it was a very inspiring presentation,” said Dr. Lee of the keynote. “It was very successful, I enjoyed it very much.” Mio Maeda, the current Consul General of Japan, was also present. “I was very impressed,” Consul General Maeda said of Mathews’ presentation. “We are very lucky to have her as the bridge between Japan and the States. She’s so devoted to the relations between Japan and Georgia, so I thank her.”
During the Q&A portion, Nita Penn, a young African American mom of twins who teaches ESL in South Korea, stood and shared her deep gratitude to Mathews. “As someone who did the same thing as you in South Korea, I feel seen,” she said, fighting tears. “I just want to thank you for sharing your story and showing people this is possible and that there are more of us out there doing the same thing.” Mathews left the podium to hug her.
“This is actually the first time I’ve ever shared my [full] 24-year experience with Japan and I’ve been wanting to do that for a long time, so I feel very fulfilled,” Mathews shared with FNN News after the event. “I’m grateful that CULTR has given me this platform to showcase to the 100 participants that were here today something that I know so well.”
Mathews’ company, Gardner-Mathews Global Management, offers project management and other key services to businesses operating internationally or wish to expand into international markets.
Mellissa Thomas reports for FNN News Atlanta. | email@example.com
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