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UI fraud scheme hits 9,000 victims in New York, more than 100 work at Greece schools

Berkeley Brean
Created: July 03, 2020 06:26 PM

(WHEC) — At the same time so many of our friends and neighbors were filing legitimate unemployment claims in March and April, an international crime ring was using real information stolen from real New Yorkers to file fraudulent claims.

News10NBC has learned thousands of New Yorkers got caught in the fraud. 

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"It appears to be foreign actors in large part," said J.P. Kennedy, U.S. Attorney for the Western District of New York. 

"The Week" magazine quoted The Seattle Times reporting the scam is the work of a Nigerian crime ring called "Scattered Canary." The fraud targeting unemployment insurance benefits appears to have started in Washington State. 

Our investigation started when we were contacted by teachers, school employees, and the spouses of teachers who got confirmation letters that their unemployment claim was approved. Some even got KeyBank debit cards with the money on them. 

But none of them ever filed for unemployment

In the Greece Central School District alone, more than 100 school employees are victims. 

I asked Kennedy if he knew why so many people in education were victimized. 

"What we have seen historically often times these requests or these false filings or false requests for unemployment are the results of data breaches," Kennedy said. "And if there's a data breach at a particular location or particular locations it may over-represent a particular group who is ever in that data pool that has been breached."

The New York State Department of Labor says it's found more than 9,000 fraudulent unemployment claims since March. It says it stopped 163 million from being paid out to the fraudsters. 

"We have disrupted thousands of fraudulent unemployment claims, protecting over $160 million from falling into the wrong hands, and we will continue to work with partners throughout the state and across the country to investigate all reports of fraud," the NYS Labor spokeswoman told me in an email.  

Gov. Andrew Cuomo warned about the possibility during his daily COVID-19 news briefing on May 17. This was part of his answer when he was questioned why payouts to claims were taking so long. 

"Just remember when the pendulum swings 30 days from now when somebody says, 'I have John Smith here who got an unemployment check and he didn't qualify and it was a fraud. Why didn't you check it before you authorized payment?'" Gov. Cuomo said on May 17. "That is going to happen and that's why balance is yes, get the checks out the door as fast as you can, but make sure the person who's getting the check is actually eligible for the check because no one is in the business of shoveling money out of a window and nobody wants to be taken advantage of."

This week I contacted one of the victims. 

Deb Padulo says she learned one week ago that her social security number was used to file a fraudulent claim. 

Brean: "Since the beginning of this crisis, were you ever laid off or furloughed? Did you ever apply for unemployment?"

Deb Padulo, victim of UI fraud: "No never."

Padulo works in the private sector and has no ties to any public school. The claim with her name was filed in early April. 

Padulo: "That means for two months I was unaware that someone had my social that was able to apply for unemployment so it's very concerning to me."

State Labor says the data breach was not on their end. 

If this has happened to you, NYS DOL wants you to file a complaint. Find the complaint form here.


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