Identity Thieves Drain Unemployment
But the most underpublicized identity theft crime is one in which thieves defraud state governments of payroll taxes by filing fraudulent unemployment claims.
It can be a fairly lucrative scheme, too. File a false unemployment claim and you can receive $400 per week for 26 weeks. Do it for 100 Social Security numbers and you’ve made a quick $1.04 million. It’s tough to make crime pay much better than that.
So writes Michael Alter of SurePayroll in “States fiddle while defrauders steal.” But he offers precious little evidence of how much this is happening. (Via Slashdot.)
[Update: Scott Blake seems to have game, set and match in a comment on how hard this would really be. (Very hard work indeed.)]
This strikes me as almost as plausible as cyberterrorism (which is to say, not very). In my state, anyway, you have to demonstrate that you worked at least 12 of the last 15 months — this is demonstrated by the state calling your old employers to check. It’s important to do that because the employer is on the hook for some of the money.
Let’s consider the threat scenario. You’d need to steal the full unemployment benefit application from the people you want to impersonate. Then you have to hope that whoever does the employment verification at the old employers does say to themselves, “Say, Fredo applied for unemployment benefits in California AND Wisconsin!” Not exactly a sure-fire ticket to wealth. And it’s a major pain in the ass. In my state, anyway, you have to file a claim every week. I think I’d rather take out 5 mortgages on a single $200k house and skip town.