There’s probably a pretty active scam going around when both your sheriff and district attorney report getting hit.
La Plata County Sheriff Sean Smith and 6th Judicial District Attorney Christian Champagne have received letters stating their “claims for unemployment benefits” have been received by the Colorado Department of Labor and Employment.
Scores of other Southwest Colorado residents who have not filed for unemployment benefits have received the same letter from the CDLE.
The idea behind the scheme is for the fraudsters to successfully get the state agency to issue an unemployment check to a person who is using a false identity to make the claim.
The CDLE reports it has received 1.1 million fraudulent claims since the pandemic began and prevented $7 billion in false payments from going out.
The scam is so common the state agency includes information in its letters about how to submit a fraud report to CDLE online if people suspect their individual data was obtained illegally.
Fraud cases are up 400% in February compared with February 2020, said Chris Burke, La Plata County Sheriff’s Office spokesman. The cases included 21 identity thefts, four fraud impersonations and one fraud by check.
But by far, the most prevalent reports are fraudulent unemployment insurance claims, Burke said.
“Even Sheriff Smith was hit with the unemployment fraud and took measures to try to protect himself,” Burke said. “Unfortunately, a lot of these cases happen. The suspects usually are in other countries. And it’s hard to prosecute these cases.”
Jessica Hudgins Smith, spokeswoman with the CDLE’s Division of Unemployment Insurance, said reports of unemployment fraud grew during the COVID-19 pandemic, when unemployment benefits were enhanced. The scams remain a persistent problem, she said.
“We have established the Colorado Unemployment Fraud Task Force,” she said. “We are partnering with the Colorado attorney general and other state and federal agencies to investigate and prosecute UI fraud.”
CDLE’s main goals are to identify fraud, prevent scams and release any benefits owed to legitimate claimants, she said.
Since the spike in fraudulent unemployment claims, Hudgins Smith said CDLE has:
Contracted with Deloitte Touche Tohmatsu, an accounting firm, to manage fraud analytics with an ultimate goal to create a fraud-detection system using the data.Tripled the size of CDLE’s criminal investigative team, with another round of hiring currently underway.Hired an external firm to provide additional investigators.Held town halls for businesses to address concerns and provide information.Champagne said Burke is correct – most reports of fraud don’t result in local or state criminal charges.
About two or three times a year, Champagne said, he prosecutes individuals for falsifying unemployment insurance claims – for example by claiming too many dependents or listing inflated salaries when employed.
But he said it’s almost unheard of to prosecute an unemployment fraud claim based on theft of someone else’s identity.
Many fraudulent unemployment claims trace back to sophisticated hackers obtaining personal identifiable information and selling it on the dark web.
Major companies that have been hit by data breeches in 2020 include Marriott hotels, MGM Grand Hotels, Nintendo, Zoom and Magellan Health.
“Those cases are notoriously difficult to prosecute. Many times, it’s just too convoluted to track the person down,” Champagne said.
Champagne said he himself had received a letter alerting him of CDLE’s receipt of his “claim for unemployment benefits.”
“It happened to me about six or eight months ago,” he said.