BEC Tactics Used for Unemployment Insurance Fraud

BEC Tactics Used for Unemployment Insurance Fraud

Michael K Hamilton undefined avatar

Michael K Hamilton


Editor's Note: This news story originally was published here on Jesse Jones's website with KIRO 7 Seattle. Click the screenshot below to hear the story and interview with CI Security's CISO Mike Hamilton.

VIDEO: Jesse Jones investigates: Scammers apply for unemployment benefits in Seattle man's name in three states

Mike Hamilton on Jesse Jones Investigating recent cyber criminals posing as citizens to collect unemployment insurance 

As the drummer for the Singing Rosenbergs, Mike Zittle is accustomed to good beats. But last week, in his mailbox, he got a bad one. It was in the form of two letters.

“You can feel there’s a card in there,” says Zittle. “I open it up and there’s a prepaid debit card. U.S. Bank.”

The cards represent a road trip in unemployment scams. One card came from the Ohio unemployment insurance program. The other, from the Colorado Department of Labor and Employment.

“I’ve never lived in these states, never worked in these states, never applied for unemployment in these state. I’ve never applied for unemployment in my life,” says Zittle.

And that means Zittle hasn’t signed up in Washington, either, where someone else also filed for unemployment assistance in his name.

Three states, one simple crime.

Commissioner Suzi LeVine heads Washington’s Employment Security Department. The state has faced hundreds of millions of fraudulent claims, to the tune of about $550 million. But, in this case, she says there’s a system to make sure something like this doesn’t happen.

“We participate in ICON,” Commissioner LeVine explains. “Is a way in which to establish and understand who is getting paid in which state.”

The system is supposed to cross-check to make sure people follow the rules and only claim unemployment benefits in one state.

I asked Mike Hamilton, Chief Information Security Officer from CI Security, for his take.

“It sounds like Ohio and Colorado have got some work to do, too,” says Hamilton.

In recent weeks, we’ve heard a lot about a BEC fraud ring in Nigeria rounding up social security numbers to steal unemployment benefits. But Hamilton says this may be someone different – an opportunistic smaller group.

“It sounds like there are a variety of actors here, using different TTPs – tools, tactics and procedures – and we’re starting to see the signals of the different actors that are involved here,” says Hamilton.

We learned, in Colorado, that a scammer filed for Pandemic Unemployment Assistance in May but the claims were backdated to February. State officials in Colorado haven’t told us whether benefits were paid in that case.

Ohio confirms someone did sign up, but no money was sent. Investigators were able to freeze the account after we alerted them to the fraud. 

But we still haven’t gotten an explanation for why the cards were mailed out if no money was put on them. 

What our identity theft victim, Mike Zittle, thinks of the system is simple:

“It’s broken.”

With his personal information in hand, Mike’s worried the scammers will come after his personal finances. And that’s a tune no one wants to hear.

We handed all of our information to investigators. There’s no convenient way of checking all the states to see if this has happened to you.

But if it does, file a police report and call the unemployment office of the state that contacted you.

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