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EDD scam by international crime ring may have infiltrated Bay Area

ByRandall Yip KGO logo

Friday, May 22, 2020

EDD scam by international crime ring may have infiltrated Bay Area

An East Bay family was hit multiple times by fraudsters using their information to file false claims with the California EDD.

SAN RAMON, Calif. (KGO) -- There are fears an international crime ring may be making its way to California to exploit the pandemic and defraud taxpayers out of millions of dollars.

Evidence is surfacing that families in the East Bay are being targeted. One family says they've been hit twice and know of at least one other local victim.

Torrey Horn showed us the letter his wife unexpectedly received from the EDD.

It was a claim she did not file. You see, the school teacher is still working.

"It's got all her current information. It's got Social Security number. It's got her current employer, which is a private school," he said.

It's a scheme similar to one being perpetrated from stolen information purchased on the dark web by an international crime ring known as the 'Scattered Canary.'

Armen Najarian from the cyber security firm Agari out of Foster city has been tracking its activities for years.

"This pandemic has introduced a new opportunity to the fraud ring to exploit capital and take cash," said Najarian.

Scattered Canary is accused of filing unemployment claims and for money under the CARES Act using the identities of other people, and then somehow steering that money into their own pockets.

"Effectively diverting funds that would have been otherwise paid to a citizen," said Najarian.

The scheme has so far been tracked as far east as Massachusetts, Rhode Island, North Carolina and Florida, and all the way west to Washington state and Hawaii with Wyoming and Oklahoma in between.

Just like his wife, Horn also received word his identity had been used to open a fraudulent unemployment claim.

In both cases, EDD loaded benefits onto a debit card.

"We think they could put a change of address in place in the post office and say, 'hey, I didn't receive the card. Could you send me another one,'" said Torrey.

The Secret Service tells us the scammers may have also intended to intercept the Horns' mail before they received it.

But Najarian says the scam perpetrated on the Horns does not appear sophisticated, and was more likely carried out by local copycats, rather than Scattered Canary.

"The preferred cash-out method is going to be some sort of digital transfer, onto a Green Dot account or into some form of money mule account they have access to," he said,

Torrey says if not stopped, the scammers could exhaust all his benefits, leaving him and his wife with nothing should they suddenly become unemployed. He, by the way, purchased his home three years ago and says the person he bought it from also received a fraudulent unemployment claim.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

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