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Biden pick for unemployment program lost $600M to Nigerian scammers
By Washington Examiner, February 4, 2021
President Biden faces growing questions about the appointment of a Democratic donor to oversee billions of dollars in unemployment benefits despite her role at a state agency that lost hundreds of millions in coronavirus relief funds to Nigerian scammers.
Suzi LeVine departed Washington state’s Employment Security Department last month, leaving behind a trail of audits and questions about how $600 million of unemployment funds could be siphoned off by cybercriminals.
This week, she took up a post as acting assistant secretary at the Employment and Training Administration within the Labor Department. The position puts her at the forefront of Biden’s coronavirus recovery plan and provoked an immediate wave of criticism.
“Washington residents who have had seen massive error after massive error from LeVine’s Employment Security Department are dumbfounded that she would be getting a promotion,” said Rep. Jaime Herrera Beutler of Washington. “This isn’t a ceremonial title or a cushy spot for donors, it’s a crisis management role and one she’s already failed miserably.”
LeVine and her husband are prolific Biden donors and served until January as deputy finance chairs for the Democratic National Committee, according to her LinkedIn profile.
The scammers caused a major scandal in Washington state, where the huge levels of fraud prompted delays in legitimate claimants of unemployment benefit at a time when hundreds of thousands of people were struggling with the economic impact of the coronavirus pandemic.
The first of five audits, completed in December, blamed LeVine’s department for failing to fix a software vulnerability that contributed to the fraud.
“ESD did not have effective internal controls in place to ensure unemployment benefit payments were made only to eligible claimants,” it concluded.
The scammers included a Nigerian ring, nicknamed “Scattered Canary” by the cybersecurity firm Agari, which first identified it. They used stolen personal information such as home addresses and social security numbers to file claims, adapting a technique already used extensively in tax fraud.
Last year, the ESD in Washington told the Seattle Times the number of fraudulent claims jumped 27-fold between March and April as fraudsters tried to cash in on extra coronavirus payments and trillions of dollars of emergency cash.
It prompted a Secret Service warning to states to be on the lookout for scammers. And in Washington state, the crisis triggered delays in processing legitimate claims for tens of thousands of workers.
Things got so bad that the National Guard was deployed to help process the backlog.
At the time, LeVine said the ESD had made changes that prevented hundreds of millions of additional dollars from going to criminals.
“We do have definitive proof that the countermeasures we have put in place are working,” she said.
Since then, the state says it has worked with federal law enforcement agencies and financial institutions to recover $357 million, leaving some $243 million missing.
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