How billions in pandemic aid was swindled by con artists and crime syndicates

When investigators raided a strip mall store in Garden Grove, California, in December, they found a line of customers snaking around the parking lot and huge stacks of cash inside the store.

Orange County prosecutors say Nguyen Social Services was charging up to $700 a pop to file false unemployment claims for people who did not qualify to receive Covid-19 relief money.

The brazen fraud was part of an overall scheme that cost taxpayers an estimated $11 million, prosecutors say.

The Labor Department inspector general has yet to complete a full investigation but, based on previous programs, estimates at least $63 billion of the $630 billion in disbursements has been misspent. The full scope of the loss in taxpayer funds is likely many times higher, experts and officials say, soaring well beyond $100 billion.

The opportunities have attracted garden-variety criminals, jail and prison inmates and at least a few desperate first-time offenders. But the most prolific offenders appear to be transnational organized crime groups out of West Africa, Asia and Eastern Europe, law enforcement officials say.

Cybersecurity firm Agari issued a report last May detailing how Scattered Canary, a Nigerian cybercrime ring that specializes in online scams, was targeting CARES Act unemployment insurance.

Researchers say it didn’t take long for playbooks on how to target unemployment agencies to pass through the dark web to like-minded scammers in places like Dubai, Hong Kong and Moscow.