Many in Gig Harbor are victims as unemployment scam sweeps the state

Identity fraud is sweeping the state, and Gig Harbor has been no exception.

Police Chief Kelly Busey said dozens of people have contacted the Gig Harbor police department to report that someone has used their personal information to file for unemployment benefits.

Dan Bjurstom, an assistant chief for the Gig Harbor Fire & Medic One, said the department had discovered 15 fraudulent claims filed under the names of firefighters or other employees, including two people who had more than one claim filed in their name.

“It also happened to the school district,” Bjurstom said. “I think it’s government employees it may be focusing on.”

The state’s Employment Security Department said earlier last month that “hundreds of millions of dollars” in fraudulent claims may have been paid out with state and federal funds in a sophisticated imposter fraud scheme that targeted the state.

Big institutions targeted

The scammers, possibly based in Nigeria, seem to be targeting governments and large institutions, such as hospitals and corporations.

The City of Tacoma said last week that at least 332 employees, across all departments, had been targeted in the scam. CHI Franciscan, the health-care chain which includes St. Anthony in Gig Harbor, said it knew of at least 440 fraudulent unemployment claims among its eight hospitals in Washington, and Multicare, which runs Tacoma General, said it had uncovered at least 50.

The New York Times reported May 16 that in a memo it obtained, “Investigators from the U.S. Secret Service said they had information suggesting that the scheme was coming from a well-organized Nigerian fraud ring and could result in ‘potential losses in the hundreds of millions of dollars.’ ”

According to the memo, Washington state was a primary target, but there also was evidence of attacks in other states.

Numerous victims in Gig Harbor

At the Gig Harbor fire department, Bjurstom said, supervisors have contacted every fire fighter and made them aware that a claim could have been filed in their name.

“Some of them could have been appropriate,” he said. “Some of the volunteer members, I don’t know if they lost their regular jobs. We had to figure out which ones were fraudulent and which ones weren’t.”

Bjustrom said they guided officers through the process of filing a report on the ESD fraud website.

“I believe we put a stop to it fast enough,” Bjustrom said.

The Peninsula School District has had a “considerable” number of fraudulent applications, said district spokesperson Aimee Gordon, although she couldn’t say exactly how many. “We are learning about those affected either directly from the employee or through Employment Security,” she said.

Kent Channing, a Gig Harbor resident who works for NAI Puget Sound Properties, said both he and his wife were victims.

“I have no idea how they got the info,” Channing said.

Channing added this scam also happened to his sister.

“I know at least 15 people who this has happened to,” he said. “My sister had it happen, and there are at least four other guys and their wives at my company. I sent a text to ten friends, and five of the ten had this happen to them.”

Millions recovered

The state has recovered an estimated $300 million in fraudulent claims and expected to receive $50 million more after “strong collaboration with federal law enforcement, our banks and financial institutions across the United States,” said ESD Commissioner Suzi LeVine last week.

LeVine told reporters that the department on one day alone had bulk-cleared 55,000 claims “based on insights we’ve gained” in separating fraudulent claims from legitimate ones.

At the same time, she said, initial claims dropped by about 68 percent.

“The dramatic decline in initial claims this week is a strong signal that the additional steps we are taking to address imposter fraud are working. We’ve already recovered and stopped the payments of hundreds of millions of dollars in fraudulent claims in the past two weeks, and we will continue to reclaim every dollar we can,” she said in a statement issued Thursday.

New headaches

But the tightening of identification requirements to prevent fraud his led to new headaches for legitimate filers. Legitimate claimants have seen their payments either delayed or stopped altogether, awaiting an ID check or other review.

About 45,000 claims were still in adjudication as of May 26, according to figures ESD released Thursday.

Since the start of the COVID-19 pandemic, more than a million people have filed unemployment claims with the state, with 807,071 individuals who have filed an initial claim having received their benefits, according to figures released last week.

LeVine noted that the state may have become an attractive target as a result of paying among the nation’s highest weekly claims benefits and being one of the first states to roll out extra benefits as part of the federal coronavirus relief effort.

LeVine said the stolen information drawn from “tens of thousands” of legitimate workers had been harvested from previous data breaches, such as the massive 2017 Equifax data breach.

LeVine said that steps to combat the fraud, include a direct hotline for reporting cases.

Hotline often jammed

But people such as Gig Harbor resident Wendy Walsh have found issues with the hotline.

“I can’t get through the phone tree,” Walsh said. “It’s about 20 minutes, and it finally says it’s too backed up to take my call.”

Walsh said her husband, Ronald Walsh, an employee at Eastside Fire and Rescue in King County, had an unemployment claim filed under his name.

“It’s irresponsible from the government standpoint to not have any verification,” Walsh said. “They are just putting the checks out, and it affects a large array of things.”

Walsh suggest that people who are employed should be able to set up an account with the unemployment security department without applying for benefits.

“You can set up an account with your number and email, so no one can apply under your name as it is already linked to your email and social security number,” Walsh said.

For more information on what the Unemployment Security Department is doing to combat the scam, visit https://esd.wa.gov/newsroom/update-on-imposter-fraud.

The ESD Report Imposter Fraud form can be found at https://fortress.wa.gov/esd/file/SecureUpload/unemploymentfraud/report.

Debbie Cockrell, Josephine Peterson and Allison Needles of The News Tribune contributed to this story.

This story was originally published June 3, 2020 at 12:37 PM.