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As COVID-19 unemployment grows, data hacks may be fueling fraud scheme, report says

The Secret Service reportedly fears that hundreds of millions of dollars could be stolen from government offices overwhelmed by the coronavirus pandemic.

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As jobless Americans look for relief during the coronavirus pandemic, the US Secret Service suspects an overseas fraud ring is using hacked data to steal identities and make off with millions of dollars earmarked for unemployment benefits. The agency believes Nigerian criminals could be using personal information stolen in past cyberattacks and fears thefts could reach hundreds of millions of dollars, according to a Saturday report from The New York Times.

The fraud ring's main target has been Washington state's unemployment office, but other attacks struck Florida, Massachusetts, North Carolina, Oklahoma, Rhode Island and Wyoming, a Secret Service memo said, according to the newspaper.

The Secret Service confirmed Saturday that it's "identified criminal actors targeting state unemployment insurance program funds," but didn't comment on the investigation details. The thefts typically involve crooks using identity theft to file bogus unemployment claims, then using social engineering to launder the resulting money so the criminals can't be traced, the agency said.

"The Secret Service's primary investigative priorities are to mitigate any attempts by criminals that target citizens for identity theft and cyber-enabled crimes as it relates to COVID-19," the respiratory disease caused by the coronavirus, the agency said in a statement.

In April, the US Federal Trade Commission spoke of more than 100 reports of identity theft related to the coronavirus pandemic and of bogus claims for unemployment benefits, but the new report indicates a much larger and better organized fraud effort.

As of this week, more than 36.5 million people have filed for unemployment benefits because of job losses caused by the fight to contain COVID-19. State unemployment benefit offices have been overwhelmed with tens of millions of US residents losing their jobs during the pandemic