New Mexicans facing ID theft, unemployment fraud after pandemic benefits surge

KRQE Investigates

NEW MEXICO (KRQE) – When unemployment skyrocketed, the New Mexico Department of Workforce Solutions was overwhelmed. The agency wasn’t staffed to answer every phone call, people faced problems getting claims approved, new programs were created, and the agency overpaid thousands of New Mexicans. Then, there was fraud.

KRQE News 13 has learned more and more people are coming forward to report they’ve become victims of identity theft related to unemployment fraud. While tens of thousands of New Mexicans needed unemployment assistance in the pandemic, fraudsters were also busy filing bogus unemployment claims.

“I didn’t know where to start, I had no idea what to do,” said Mark Maydew. Maydew is the Chief Financial Officer for Duke City Urgent Care in Albuquerque, and he’s not alone in learning someone filed a fraudulent unemployment claim under his name.

Maydew learned in April someone used his identity to file a fraudulent unemployment claim. KRQE News 13 found Maydew’s name, along with dozens of others, through a public record request with Bernalillo County. A growing stack of victims are learning someone used their private information to collect unemployment money.

“Someone was trying to get unemployment through the laboratory under my name,” one woman told a Bernalillo County Sheriff’s deputy as she was filing a report over the phone. According to the deputy’s report, the woman works at Sandia National Laboratory and was alerted of the fraud through her HR department.

“It’s almost like waiting for your turn to be a victim,” explained Brian Watson, Special Agent with the Internal Revenue Service. “Unfortunately it’s like whack-a-mole. When you take out one group of criminals, there’s always someone willing to take their place.”

“Mine was the first that came through our organization that we found,” said Maydew. “Since then, I’ll tell you, it has exploded.”

Maydew has friends and family who’ve also been victimized. He said it’s an HR nightmare dealing with the fallout of having your identity stolen.

Local law enforcement is busy taking those reports. Victims are coming forward to report identity theft cases tied to fake unemployment accounts. “My name and they have my social, and everything,” said one woman. “I think I am compromised,” she told a deputy. “I’ve never filed for unemployment.”

ID theft victims are coming forward

Some people are learning they’re victims through their mail, receiving letters from the Department of Workforce Solutions about benefits they never filed for, or getting surprise debit cards issued from the state. “As people are kind of starting to hear more about it, they’re more likely to report it,” explained Weylin Proctor, a detective with the Bernalillo County Sheriff’s Office, and part of the U.S. Secret Service Cyber Fraud Task Force. Proctor is working with federal authorities to investigate and prosecute unemployment fraud cases.

“I think everyone in my task force from BCSO, all of us have probably around 40 to 60 cases that are actively assigned to us,” said Detective Proctor. “We just have a backlog of them waiting to be assigned to us.”

He said victims of unemployment-related identity theft should file police reports, check their bank and credit card accounts, alert the Internal Revenue Service, and contact the Department of Workforce Solutions to lock the fake claim. Reporting the fraud helps investigators track cases. “We’ve identified a lot of our fraudulent activity connected to the Pandemic Unemployment Assistance Program,” explained Ricky Serna, Acting Secretary for New Mexico’s Department of Workforce Solutions, the agency in charge of our state’s unemployment insurance program.

“We doubled down on this on the staff that we had available, to do fraud detection,” said Serna. “And I want to start by saying we believe that the Pandemic Unemployment Assistance Program was critical.”

To paint a picture, Serna explained Workforce Solutions received roughly 74,000 phone calls in the month of February 2020, right before the first cases of COVID-19 were confirmed in New Mexico. By April, two months later, the call center was inundated with 3.4 million calls.

Businesses were shuttered, forced to close down in an effort to keep COVID-19 from spreading through communities. More than 100,000 New Mexicans lost their jobs in the pandemic.

“That was very difficult to keep up with over such a short period of time,” Serna told KRQE News 13.

But for people like Maydew, who said he was working more than ever in the healthcare industry, dealing with his fake unemployment claim is an added headache. He said despite reporting the fraud to DWS, the fraudulent claim filed under his name was still approved.

“The other risk that kind of scares me, it’s whoever got this, are they going to file a false tax return?” Maydew said. “And then I have all the IRS complications to deal with.”

Watson said now more than ever, identity theft crimes are on the rise in the age of online phishing scams. “In my 25 years with the IRS, the amount of fraud relating to scams is unbelievable,” he said.

What can people do about it?

If someone gets a 10-99 in the mail from the IRS for benefits they didn’t file for, Watson warns people to not ignore it. “Some people will say, ‘Well that’s just a mistake, I didn’t receive those unemployment benefits, I’ll just ignore that letter.’ You’re doing that risking your own financial situation,” said Watson.

It may not stop at unemployment fraud, he added. Criminals often take out lines of credit using stolen identities. Local, state, and federal agencies are already overrun with ID theft cases from online phishing schemes.

When KRQE News 13 asked if the federal government is well-equipped to deal with this issue in front of us now, Watson replied, “I hope so. I really do.”

“You can save yourself a huge headache by just being very cautious and deleting emails you don’t recognize,” Watson explained. It’s often difficult for identity theft victims to pinpoint when their private information was compromised, but it could stem from clicking on a malicious link, or downloading a bad app on your device.

Example of a fraudulent text message

Once a criminal has someone’s private information, they can try and sell it on the dark web, try to open lines of credit or apply for pandemic-related assistance through state unemployment offices. Serna said he’s learned first-hand just how shameless fraudsters are. “I’ve directly interacted with individuals who were part of a fraud ring involving family members,” he said.

“I’ll say at the very least, it’s been difficult. Because you talk with somebody that you know is genuinely in need of help, and that very next call is someone that’s using that same story, right – to defraud the system,” Serna explained. “And we’ve got to hit the reset button with every conversation we have to be sure everybody’s served the right way.”

Catching the criminals is another challenge

A federal search warrant filed in May shows Homeland Security Investigators were tipped off to an unemployment fraud case involving the identities of 65 people.

The break in that case came after a UPS driver said he was offered $4,000 to leave two packages at a vacant home, which the driver refused to do. It turns out, the packages had debit cards loaded with unemployment funds.

The search warrant shows investigators found a series of Facebook messages from Andrew Shainin, exchanging information about counterfeit IDs and stolen social security numbers used to obtain fraudulent benefits. “I need some COVID money lol,” one of the Facebook messages said. Shainin has not been charged yet for the crime.

So what is the success rate for finding and prosecuting criminals behind unemployment fraud? “I think that’s going to be a number that will need to be published kind of after the book is written on what this pandemic did to unemployment as a system,” said Serna.

“Unemployment is there for a reason. I think it’s important,” said Maydew. “I would like to see just more controls on the system as a whole,” he explained.

According to a Legislative Finance Committee report earlier this year, Workforce Solutions may have shelled out more than $100 million toward fraudulent unemployment claims during the pandemic.

Serna said the department has stopped more than $172 million from going out the door connected to reported ID theft or fraud cases. He also said Workforce Solutions has stronger protocols in place now.

“Now we have fraud specialists from Human Services, Tax and Rev, Department of Information Technology,” Serna explained. “And now they’re coming to the table with some ideas that we think is just going to further strengthen how we manage fraud in the future.”

Example of fraudulent text message

Just this week, the Department of Workforce Solutions warned of yet another way fraudsters are trying to obtain personal information, through fake text messages with links. The link will take people to a website that may look like the state’s website, but it is not, and the agency warns against anyone clicking links in text messages from numbers they do not recognize.

A spokesperson for Workforce Solutions said the agency will never text someone to do anything in regards to their unemployment claim. The only reason someone may receive a text message from Workforce Solutions is for two-factor authentication when someone initially sets up their account.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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