Federal unemployment benefits money siphoned off

According to data from the US Department of Labor, the government had issued up to $872 billion in pandemic assistance to be given out as unemployment benefits. However, almost 10% of this amount has been siphoned off or lost due to improper payment and other frauds. Unprecedented funding from the government led organized thieves and crime rings to target the unemployment benefits. 

During the pandemic, the government started pandemic aid programs which ended on Labor Day this year. Much of these programs were aimed at proving financial aid and support to those who lost their source of income generation due to the pandemic. Much of the fraud was contained to the Pandemic Unemplymnet Assistance scheme which provided benefits to gig workers and self-employed workers who weren't considered for unemployment benefits under the traditional federal system. Due to the overwhelming surge of requests and in an attempt to expedite the process, lawmakers let the applicants self-attest to their qualification for the benefits as opposed to the traditional federal benefits which require much more verification before being processed. Although this move helped expedite the process greatly and provided aid to families suffering from the greatest recession post the Great Depression; the lax verification process and a weekly increase of $600 in benefits paved a path for anti-social elements to exploit the system. 

Much of the fraudulent activities have been linked to organized crime rings that bought identity information that was stolen from previous data breaches and used this data to apply for benefits in the name of others. This also meant that some families who are in real-time need of the benefits are deprived of it. 

Source: CNBC