US Secret Service: “Massive Fraud” Against State Unemployment Insurance Programs

https://krebsonsecurity.com/2020/05/u-s-secret-service-massive-fraud-against-state-unemployment-insurance-programs/

by elsewhen • 6 years ago

676 466 6 years ago

TeaDrunk2• 6 years ago

I’m surprised banks literally don’t have the ability check for suspicious behavior like blatantly having the same account receive multiple unemployment benefit dollars from a state that the person doesn’t reside in...

toomuchtodo5• 6 years ago

That’s not the bank’s responsibility. This is no different than the issues IRS faced with fraudulent refund activity. Unemployment systems should’ve invested in KYC-like systems, knowledge authentication, etc.

Simply look at the talent running unemployment departments though. No engineering mindset, no accountability, hence financial fraud with no repercussions for government or perpetrators.

For the love of Vint Cerf, please get involved in local government if you’re a technologist. It is the only way this gets better.

catalogia• 6 years ago

Doesn't it kind of become the bank's responsibility once they become aware they're holding onto criminal proceeds? Or is that why banks prefer not to pay attention, so they don't become aware of such things?

sokoloff2• 6 years ago

Most technologists likely have an aversion to anything as backwater bureaucratic as government “tech” programs. Couple that with pay that wildly trails the market and the outcome is fairly easy to predict I think.

A4ET8a8uTh02• 6 years ago

Well, no. I wish that was the case but no. You would be surprised how invasive BSA law is. The main reason banks basically gave in on SARs was the legal protection they have for it. This coupled with little average teller is trained results with suspicious activity report stemming from customer saying 'none of your business' to a teller.

And I assure you that when auditors ask an officer question why SAR was not filed ( most recent Moneygram case ), BSA officer is sweating bullet.

So based on current setup in US, it is banks' responsibilty. And just to add to this, this scheme is being actively copied across the world.

FinCEN case link: https://www.fincen.gov/news/news-releases/fincen-assesses-1-...

apta8• 6 years ago

Why is it so hard to enforce banks to report such transactions? Doesn't the US force foreign banks to report balances of US citizens residing overseas? Oh the double standards.

nodesocket• 6 years ago

Banks already have responsibility to prevent money laundering by submitting a form when you deposit over $10k in cash, it’s called a currency transaction report and sent to the IRS.

rootusrootus• 6 years ago

I'd put it as much on the state. From the bank's perspective it's just an ACH transfer. The state knows what it's for and is arguably in a better position to detect anomalies. And the state should be doing better due diligence to verify identities and eligibility.

aswanson• 6 years ago

States are processing claims in cobol on mainframes from the 1970s. I think you overestimate their data science ops.

TeaDrunk2• 6 years ago

Banks already have fraud protection on credit cards and are responsible for reporting suspicious amounts of depositing (above a certain amount). Thus is the basis of my shock that something similarly obvious isn’t covered.

spacephysics• 6 years ago

I agree, but I hope such analysis requires a warrant or just cause - instead of having banks check their customers activity, it should come from the other side, institutions that send the money out perform a cross-reference for the same person (whether defined by name, account, etc). Then the issue is some people are working, but under the table, and collecting benefits. That’s a bit harder to detect

elliekelly2• 6 years ago

Banks absolutely do have this ability and I would guess SARs from banks are what led to the Secret Service eventually uncovering this elaborate scheme. Though I imagine more SARs would have come from the outgoing transfers (from the mules’ accounts to the criminals) than from the suspicious unemployment deposits. Generally government money is considered “clean” but if a mule suddenly started receiving more money than usual it would be investigated regardless of the source.

12xo8• 6 years ago

I find it ridiculous that you cannot buy pseudoephedrine without the pharmacy checking whether you've purchased any quantity of the OTC medicine in any other state via a inter-agency, multi-state networked solution... And yet this kind of stuff still exists.

There is more than enough way to solve these problems, but for some f'n reason there is no will...

buildbot• 6 years ago

Probably not not helpful, but meanwhile just a little bit north in Canada they sell excellent otc allergy medicine with pseudofed. Just wild what we choose to prohibit.

microcolonel3• 6 years ago

Meanwhile banning coffee roasts and pieces of outerwear because they sound vaguely like the name of scary-looking guns.

I feel like there's just so much in the state now, we need mandatory sunset on anything like this.

Review of legislation and rules/regulation should be routine, rather than boutique, and each time we should be called upon to make a positive case for each rule.

blahbhthrow3748• 6 years ago

Pseudoephedrine in Canada has to be mixed with acetaminophen, which is difficult to separate back out for meth cooking.

alistairSH2• 6 years ago

There's no upside to fixing it for the political class.

lisper3• 6 years ago

To the contrary, this sort of thing is beneficial to the political class because each side can point to it and blame the other side.

In fact, the worst case scenario for the political class is a well-functioning society with no urgent-seeming problems to be solved because in a situation like that people will start to wonder why we need the political class at all.

JumpCrisscross• 6 years ago

for some f'n reason there is no will

Short of overhauling personal identification in the U.S., I don’t see a simple solution. Making unemployment benefits more tedious to claim is politically risky.

umvi• 6 years ago

Making unemployment benefits more tedious to claim is politically risky

Any change (resulting in potentially reduced benefits) to any social service results in the following headlines in the next days news:

"President X yanks benefits for the nation's most vulnerable"

OnlyOneCannolo• 6 years ago

How is personal identification an issue for unemployment but not for buying medication?

12xo8• 6 years ago

Just to add a little to the fire: When you go to the airport do they check your ID before you get on the plane or after?

IMHO implementing a 2FA or a ID verification wouldnt be a burden on anyone but the bumbling bureaucrats. This problem isnt limited to UI, its a major problem (10's of billions) at the IRS. Who will send a refund before they even check the return or the income.

They send the refund to the first filer, with no verification! But when it comes to collecting the funds, they will hunt you down if your EIN doesnt match your entity name on the most obscure forms...

0x8BADF00D2• 6 years ago

It is a simple solution, it’s just that some states don’t want strong ID laws. They are willing to turn a blind eye to illegal immigration for votes. As much as I find that unconscionable, it is up to the states to design their IDs and ID laws.

Aeolun2• 6 years ago

more tedious to claim is politically risky

I would call that ‘more efficient’.

Besides, they apparently have ‘hundreds of millions of dollars’ to spend on it.

novalis78• 6 years ago

There are various attempts on county and state level to implement forms of (blockchain) based personal identification systems that would be flexible and reveal only the necessary information based on the recipient and issued by the state (Florida / Seminole county is working on such a system). But one big issue is definitely the lack of technological literacy in the ranks of government officials.

freddie_mercury2• 6 years ago

This is an assertion without evidence. Numerous states have intentionally made unemployment benefits more tedious to claim. Florida is particularly famous for this at the moment with hundreds of news articles about it. All their changes to the system came with essentially zero controversy or political risk. (No doubt there were a handful of ineffective local organizations that complained at the time but no one's reelection was remotely threatened.)

karatestomp• 6 years ago

Lots of the solutions involve something like a national citizen ID program (for an efficient implementation). Done right it fixes tons and tons of problems that cost normal people piles of time and money every year, plus whatever the costs are to businesses and government. But a few political factions—mostly on the right, if you go looking for them, like religious folks who see such IDs as end-times related (yes, seriously), some stripes of libertarian, and the very much real group of people who don't want government to work well—are very against solutions of that sort.

scarface74• 6 years ago

Because the “War On Drugs” is moralistic signaling...

verst10• 6 years ago

EDIT: The following may be specific to the U.S. state.

Also ridiculous but only tangentially related: Psychiatrists (or similar functions) cannot send prescriptions for ADHD drugs (Adderall / Amphetamines etc) to pharmacies (by any method) [EDIT: at least in Washington State as of March 2020]. You need to pick up the physical prescription from the health care provider, then take it to any pharmacy. The pharmacy may not even have the medication, and certainly will need some time to fill it on the spot.

Of course this is a controlled substance. Somehow this process is imposed by the DEA perhaps together with the FDA (unsure). I know it's a running joke to throw out the term Blockchain, but this really is where Blockchain might be a good solution. Regardless I don't see how a physical piece of paper changes the potential for abuse or any tracking of the patient. The pharmacy doesn't exactly make me verify my identity any differently from normal prescriptions to be picked up.

Also, the prescription is generally only issued for a month. You may get a few prescriptions with different start dates into the future. So every month you will make your pharmacy scramble (and waste your own time) because they could not prepare for your prescription to be filled.

All of this is even more annoying in the time of COVID-19. I need to unnecessarily have in person interactions for things that can happen remotely or virtually.

jetti2• 6 years ago

This is not true anymore, Adderall can be sent electronically to the pharmacy. It makes things so much easier since I don’t have to find time to get into the office to pick up the paper prescription.

marcinzm2• 6 years ago

This isn't the case in NY from my understanding as I've seen psychiatrists send ADHD prescriptions digitally to both physical pharmacies and delivery pharmacies (Capsule). So it might be a restriction imposed by your state.

colejohnson662• 6 years ago

Also ridiculous but only tangentially related: Psychiatrists (or similar functions) cannot send prescriptions for ADHD drugs (Adderall / Amphetamines etc) to pharmacies (by any method). You need to pick up the physical prescription from the health care provider, then take it to any pharmacy. The pharmacy may not even have the medication, and certainly will need some time to fill it on the spot.

This is not true, at least in California. I take a certain ADHD medicine that’s a Schedule 2 drug. So I’m limited to 30 day prescriptions with no refills (so my doctor sends in 3 at a time), but my doctor can most definitely send them direct to my pharmacy.

vharuck• 6 years ago

In PA, my doctor's only been able to send Adderall prescriptions directly to the pharmacy within the past couple years. If yours doesn't, check that it's not a rule from your insurance. My insurance makes me sign a form to choose the only pharmacy location I can use for those meds, amd I need an appointment with my doctor every 6 months.

It's hard to tell what's a federal law, a state law, or my insurance company judging me as a likely junkie.

SilasX2• 6 years ago

Uh what? This seems like the kind of thing solvable with routine electronic authenticated messages from doctor to pharmacy. The problem there is mandating the dubious paper method as the only way.

metalforever• 6 years ago

Why do they have to make this such a pain in the ass? They are trying so hard to restrict abusers that it makes it almost impossible to get treatment if you actually have ADHD. Do you know what people with ADHD do? Forget to make appointments because they got distracted. Essentially the system is set up to be hostile to ADHD sufferers to actually get help . I ended up having to pay concierge mental health to consistently be able to fill this script. The doctors would sometimes refuse to see me because of this diagnosis, and the pharmacies would lie to me that they were out of the medication and to come back on x date. If I do this they just repeat the same statement and choose a different random day. This was so much trouble that I spent years without treatment and it affected my life terribly. I did things like cause 10s of thousands of dollars in damages to apartments due to Inattention, almost getting myself fired, driving extremely poorly, almost failing out of school. This condition is preventing me from doing things I really want to do with my life because theres a wall of motivation I have to get over, even for things I enjoy.

api2• 6 years ago

Meanwhile meth is ridiculously easy to get and can even be ordered on the dark web with little chance of getting caught.

The whole system is just shockingly stupid.

prepend• 6 years ago

This is what my doc told me, that prescriptions had to be via paper in my state. Another doc said he sent electronically but had to pay a high fee to set up a system to do it for him.

During covid, my doc all of a sudden started sending electronically.

I’m not sure if my doc was wrong, or lying, or just didn’t understand the stupid regulations around some meds.

oefrha• 6 years ago

It’s funny 90% the time people throw out the claim “blockchain is a good solution for this”, what they really have in mind is just an append-only database controlled by trusted parties. (Before someone tells me the story of Coca Cola’s supply chain, thanks, I’ve heard dozens of times.)

mschuster91• 6 years ago

I know it's a running joke to throw out the term Blockchain, but this really is where Blockchain might be a good solution.

Why so complicated? Most use cases for Blockchain could be solved by public-key cryptography, technically backed by using a national government issued, RFID capable ID card (drivers license, passport, whatever) and it's trust chain.

boomboomsubban2• 6 years ago

So from my understanding, most prescriptions are handled over the phone/fax, and regulated drugs require some kind of verifiable signature that a fax does not comply with. I believe mail works fine though, as none of this makes sense.

There is an e-signing program that I think lets the pharmacy watch the signature being made or something that is now fixing this issue, but I hear it is both expensive and rather difficult to use.

Look for a pharmacy that offers delivery, they can make the trip to your doctors office for you as again these regulations are ridiculous.

alasdair_6• 6 years ago

Every month I end up playing the game of "will they have my medicine?" and regularly have to drive around different pharmacies to find one that can fill the prescription that day (because they only fill one every thirty days, and there is exactly a thirty day supply given, so there is zero buffer).

This becomes far more problematic if I have to travel for work (which was very common pre-COVID) and I'd literally have to drive an hour to a 24hr pharmacy and wait until 12.01am on the day of my flight, then wait half an hour to get the prescription filled, drive an hour home, then leave at 5.30am to get my morning flight.

And if the refill date occurs when I am away, I'm SOL - CA won't take a prescription from WA for a controlled substance. I usually have to ask my wife to go in early to pick it up, then spend a ton of money to overnight the medicine to my hotel.

There needs to be a system that allows for people who have been taking the same stuff for years to have SOME kind of buffer or slight flexibility. The current system is bullshit.

isbjorn16• 6 years ago

I don't know if it's because you're talking about a psychiatrist or not, but my wife takes Vyvanse for ADHD, prescribed by her family doctor. Ours just retired, and while he wasn't allowed to do more than give her a paper prescription to pick it up each month, the NEW doctor can, because she is set up to send it electronically.

Most other prescriptions he could call in, but I think in WA there's a special system you have to get set up with to do it yourself.

Now my wife doesn't need to physically pick it up anymore. If it would be useful to you, I can find out from my doctor's office what system they had to be part of to allow them to call in prescriptions like that.

akhosravian• 6 years ago

This isn’t true in Washington. My psychiatrist has been sending my ADHD meds for digitally for a few years now.

https://www.addcenterofbellevue.com/ If you’re interested in a new doc.

robbiep• 6 years ago

I know this is only dealing with a tiny portion of your comment, but why do people think digital prescriptions require a proof of work database, when matching a UDID and changing a 0 to a 1 would suffice?

lottin2• 6 years ago

I don't understand why it has to be so complicated. In most of Europe you go to a pharmacy with your health insurance card and 30 seconds later you walk out with the drug you have been prescribed. On the rare occasions when it is out of stock you can come back later (usually it takes only a few hours) or go to another pharmacy around the corner where the chances are they will have it.

morpheuskafka2• 6 years ago

It would be enforced by the DEA, but as far as I remember, the requirement that only paper prescriptions are accepted for C-IIs is written into the law itself. So only Congress could change it.

There is actually a way to e-prescribe, but there are strict security requirements and I think it varies by state. IDK why blockchain is needed though, an ordinary digital signature ought to be enough and that's what the e-prescribing rule requires.

freddie_mercury2• 6 years ago

I find this post interesting because the OP lept to blaming "The Feds" and specifically the FDA and DEA (two frequent targets of popular ire) even though subsequent replies make it clear the OP has no factual basis for any claims made.

pwg• 6 years ago

I find it ridiculous that you cannot buy pseudoephedrine without the pharmacy checking whether you've purchased any quantity of the OTC medicine in any other state via a inter-agency, multi-state networked solution

Not defending the practice, but the supposed reason for this is because pseudoephedrine can be used in cooking methamphetamine [1], and supposedly the 'cooks' had mules going around buying up stock everywhere to use in their labs.

The 'check' was supposedly to catch the mules buying large quantities across plural pharmacies/states to use in the cook's labs.

Sadly the unintended consequence is every time one has a head cold and buys original formula Sudafed, some government tracking database somewhere knows one bought that product.

[1] https://www.chpa.org/Meth.aspx

briffle• 6 years ago

In the state of Oregon, you can't get the 'real' stuff without a prescription. So you get to pay for a Dr visit, to get decent cough medicine. Or you stock up when you are near Washington. :-)

pbhjpbhj5• 6 years ago

In the UK they seemingly just removed all the active ingredient. I couldn't understand how it wasn't working for me, Sudafed had been an almost miraculous way to clear a head cold (mucus blocked sinuses); then it just didn't work anymore. Of course they put caffeine in to try and make it feel like it was working ...

Recently, after careful analysis I found they do still make it (or they make it again), but it was a definite bait-and-switch.

smogcutter• 6 years ago

I think parent understands this, and is comparing the controls around pseudo vs the inefficiency of the unemployment system. It’s just the conversation swerved to everyone checking in about whether their doctor can call in their adderall prescription.

The difference here is that one system has federal “war on drugs” muscle behind it, and the other... very much doesn’t.

eli_gottlieb• 6 years ago

There is more than enough way to solve these problems, but for some f'n reason there is no will...

Because the point of the unemployment bureaucracy is to prevent the utilization of unemployment insurance. The easiest and cheapest way to do that is to just make the whole thing suck, which also, as a side-effect, makes it vulnerable to malicious actors.

api2• 6 years ago

White collar crime is treated very differently from street crime or other kinds of lower class crime. I'd almost say it's not prosecuted at all. You have to be pretty flagrant or step on the wrong "third rail" to go to jail.

Make a few grams of meth? Go to jail. Launder billions in drug money at a major financial institution? Get a small fine and probably keep your job.

The current president of the United States is a borderline white collar criminal, though most of his past scams are of the "greasy" sort that are just barely on the right side of the law.

It's basically all about the social class of the criminal. The word "villain" comes from the same root as "villager" and means a person of lower social class.

https://www.etymonline.com/word/villain

A while back I found a fascinating crime map of white collar crime. It showed the inverse of what you see for street crime, with huge white collar crime hotspots in richer more upscale neighborhoods. In Compton (Los Angeles area) you are more likely to have your wallet stolen. It's safer to walk around in Santa Monica or Newport Beach, but the person you pass on the street is more likely to be stealing your pension.

gfxgirl• 6 years ago

You want a reason, watch this

https://www.pbs.org/wgbh/pages/frontline/meth/

I have no idea whether or not to trust frontline because they've seemed on the wrong side of things for certain topics I know more about but, at least that made it clear to me why that stuff might be a controlled substance

nilram• 6 years ago

There is no will to improve those systems because people on unemployment aren’t typically a group that can donate funds to politicians.

0x8BADF00D2• 6 years ago

If it’s trivial to do this type of fraud, imagine how easy it is to falsify voting records. Especially in states that don’t have strict voter ID laws.

secabeen2• 6 years ago

It may be easy to engage in Tax and UEI fraud, and they get away with it because the money has already left the country, but they do get detected, regularly. To follow your metaphor out, if this were happening with voting records, we'd have lots of people reporting that they went to vote and their vote was already cast. That is not the case.

12xo8• 6 years ago

This comments demonstrates a willful ignorance to actual facts and shows a bit of gas lighting. So cite the stats, the studies or any meaningful article that shows there is what you claim. False voting records.

tptacek4• 6 years ago

People say this on message boards all the time but I have literally never had a problem buying pseudoephedrine. I just walk up to the counter and ask for it. It's faster than buying a steak at the meat counter.

It's not as if any of us are unclear on why sudafed is controlled.

mrits2• 6 years ago

I'm not sure what you are trying to argue here. It's not difficult to buy pseudoephedrine but it is tracked by the ID you provide. And if you go over the limit you can't purchase it anymore. Is this what you are disputing?

12xo8• 6 years ago

You're missing the point. It's the fact that our government created / mandated this multi-agency, multi-state, multi-private/public process and it was implemented in a matter of months. All to prevent people from buying too many boxes of decongestant at one time... The scale of that particular problem pales in comparison to the 100's of billions being tossed to thieves via flawed IRS and UI claims processes.

tootie• 6 years ago

My one and only foolproof strategy to getting a bureaucracy to take security seriously: wait for a giant breach and tell them "I told you so." If you've got a remediation plan on hand and ready to fire, that's your chance to get funding.

Aeolun2• 6 years ago

Not my money syndrome?

djaouen• 6 years ago

This is because the shadow government is looking to force The Jesus to return.

Not kidding here.

wutbrodo• 6 years ago

There is more than enough way to solve these problems, but for some f'n reason there is no will...

It's pretty straightforward. Most people are simple-minded or dishonest enough that they can't understand or admit that policies they like can be inefficient or flawed. In the case of pseudoephedrine, the public conversation doesn't have too many advocates for meth dealers or trivially inconvenienced shoppers. By contrast, any inkling that a government program could be run more efficiently is immediately met with howls of outrage that reform proposals are just cover for the real goal of forcing poor people to starve.

Once you know what to look for, you'll see this for _almost literally every topic_ of this type, from infrastructure to public schools.

lgleason• 6 years ago

Not surprising given the creaky state un-employment systems. I would not be surprised if bank account numbers are compromised as well.

irishcoffee2• 6 years ago

The bank account numbers on a personal check or the one you give your employer for direct deposit?

xur17• 6 years ago

Aren't those the same?

CodeWriter232• 6 years ago

I would not be surprised if bank account numbers are compromised as well.

I don't that works too well for this kind of scam. What do you do with the money? ACH it to a totally traceable other account? This scam relies on a network of trust, that the mules will draw out the cash and take their cut (and only their cut) and walk the funds to another location for tender.

elliekelly2• 6 years ago

That’s what I don’t understand about this kind of scam. It seems like an awful lot of work. Juggling all of your fake internet significant others or employees and then building up enough trust to make the ask. I can’t imagine the payout is that substantial given how much effort would be required.

Fiveplus• 6 years ago

This is a repost. @dang

gus_massa• 6 years ago

I only see https://news.ycombinator.com/item?id=22990237 but it has only 3 points.

From the FAQ:

Are reposts ok?
When a story has had significant attention in the last year or so, we bury reposts as duplicates. If not, a small number of reposts is ok.

chrisseaton2• 6 years ago

That's allowed. And 'at'ing people here does nothing as far as I know.

jld• 6 years ago

I got a letter yesterday informing me I made an unemployment claim. Bummer.

kryogen1c• 6 years ago

remember when SSNs were being implemented and the government promised it wouldn't be used as a personal identifier?

iaresee• 6 years ago

I've only been in the USA for less than a decade but when I landed here and got my SSN I got a pretty good lecture at the window from the Federal worker about never giving this out, keep it safe, yadda, yadda, yadda...

...and was then asked at every turn, by every website and application and whatnot, to provide four or more digits of this number to accomplish even the most benign things.

There's what the US government thought it would be and then there's what it's become because zero enforcement on use of it as a national person identity number was ever enacted.

The "don't give anyone your SSN" trope has become one of those household jokes. Right up there with "American's don't pay high taxes".

jniedrauer• 6 years ago

And those 4 numbers that they always ask for are the only part of the SSN that isn't procedurally generated from public information.

Jakawao• 6 years ago

In 1936? Sorry, I don’t remember that.

ashtonkem• 6 years ago

Not personally, because I’m not 90 years old.

But you’re right that the original purpose wasn’t identifying people, however it was private banks that really latched onto it as a convenient way to identify people and associate debts to individuals.

apta8• 6 years ago

Just goes to show how much of a net negative the parasitic banking system is on society.

mech422• 6 years ago

When I worked on Wall Street way back in the 90s we knew SSNs were useless for any sort of id...

Too many 'shared' SSNs in, too many stolen SSNs. I highly doubt any financial instituation is using SSN as anything more then then 'corraborating' account access at this point.

BTW - you might find this interesting: https://www.ssa.gov/history/ssn/misused.html People thought they were getting an SSN when they bought the wallet...

acomjean• 6 years ago

yeah. My college id number was my social and that was in the 90s. License numbers typically were too.

loeg• 6 years ago

You were alive in the 30s? No, I don't think most of HN's audience remembers that time.

codegeek• 6 years ago

Try telling a Doctor's office you don't want to give them your SSN. I personally make it a point to NOT give them my SSN and they always give me hell for it. Sometimes I give up but whenever I can, I try to fight it.

chrisseaton2• 6 years ago

What do they want it for?

mixmastamyk2• 6 years ago

It’s been easy in my experience. I say the magic words “will pay up front.”

ValCanBuild• 6 years ago

Same thing is happening with the UK furlough scheme. Government is paying 80% of people's salaries while they're off work but some employers are actively defrauding the scheme and telling those people to work...

yalogin• 6 years ago

I am amazed at how well these criminals from another country know the details of the systems in the US when we in the US have probably a handful of people who understand the end-to-end line they do.

I am not surprised this is happening. The small offices in each state are responsible for 100s of millions of dollars and they awfully unequipped for it. This is sort of thing that the federal government should do and provide a portal for each state to use so that they can track and do stuff across states to look for fraud. However i don’t know if states rights and separation of duties screws this up.

mistrial9• 6 years ago

people in business in the USA hire outsiders to do the dirty work, or afterwards such relationship leaks the details provided, to others who are just willing.. Why is USA federal IT work outsourced three times before it is done? What USA business owners, former owners, their accountants and others, are just in it for the money and tired of others winning while they work so hard and lose, etc.. SO .. there is some collusion across borders, most likely

MattGaiser4• 6 years ago

when we in the US have probably a handful of people who understand the end-to-end line they do.

Is it a hard thing to understand or is it just something that doesn't get done?

I work for a municipal government (not in social assistance though). Very little is documented, not because it would be hard to do so, but because first everything from budget to approved software for documentation to time allocation to 5 different approvals would be required to do it. We are terrible at sharing information internally, so every thing would require meeting after meeting to chase down who knows what as well.

Actually documenting the system I work on would take 1-2 days. But we initiated an overarching documentation plan in November and it is still being worked on (if it has not died from neglect).

avianlyric2• 6 years ago

I am amazed at how well these criminals from another country know the details of the systems in the US when we in the US have probably a handful of people who understand the end-to-end line they do.

It’s quite literally a criminals job to understand and abuse these systems, and there’s very clear link between their performance and their reward. Makes for a good motivator.

People frequently underestimate criminals because they don’t appreciate that these individuals are doing this work as full time job. I’m sure if you spent 8 hours a day for week, you’ll have an equally good understanding.

joncrane2• 6 years ago

I always find it ironic that for all but the most lucrative criminal enterprises, if the criminal applied the same amount of effort towards pursuing legitimate employment, they would come out ahead (adjusted for risk of course).

Some people just enjoy "getting over" more, to the point that they will discount their labor used for such schemes.

pnw_hazor15• 6 years ago

Many of the US systems were/are very trust based. Unfortunately trust based systems are too vulnerable to fraud these days.

It will take time to redevelop the systems and thinking to be more fraud resistant.

However, many in the US equate validation or verification as too intrusive, too discriminatory, or both.

mattm• 6 years ago

we in the US have probably a handful of people who understand

When I moved to the US from Canada and HR was helping me setup my health insurance on the first day, I was overwhelmed trying to understand it and said "Sorry, I don't really understand how health insurance works here."

The HR person responded:

"That's ok. Most Americans don't understand how it works either."

meshaneian• 6 years ago

That HR representative appears quite talented. Nobody knows how it works, or there would/could not be significant "administrative" changes daily as insurance companies (and really any businesses) find new ways to take more of your money without any risk or possible recourse. They do whatever they want.. at least that they believe they can get away with long enough to make a profit.

m4633• 6 years ago

I think a lot of US immigrants are more well versed in the workings of the US government than native born citizens.

This is because they have a source of comparison, and it is on the test! (if they go for citizenship)

Although some US citizens get how well some things work in the US compared to other countries, they have blind spots for some things that don't.

I got sick in Mexico once and went to a doctor there. I paid in cash and it was something like $2. If I wanted, I could get my medicine in pill or hypodermic form.

machbio• 6 years ago

This is so True, as an immigrant - I have changed jobs and every orientation when talking about benefits does not break down the cost to the employee - resulting in "just sign here" so we can be done with everything mentality

caconym_• 6 years ago

Most Americans don't understand how it works either.

When I dislocated my jaw and went to an in-network ER for treatment (it popped back in as I was sitting on the bed), I wasn't surprised to get a call from a collections agency regarding bills I never received from an "out of network" shell corporation for "consulting physicians" (never even saw a doctor, only a nurse), but I definitely didn't see it coming.

Count me an average American, I guess.

LudwigNagasena• 6 years ago

However i don’t know if states rights and separation of duties screws this up.

The history of the US shows that such things matter only when there is no bipartisan support.

See for example the Commerce Clause that explicitly grants the Congress the power to regulate interstate trade, yet it is used as a basis to justify intrastate regulations (e.g. drug prohibition).

unishark4• 6 years ago

This seems to e a general cultural thing where rules are seen as malleable. See how well the lockdown is (not) being adhered to.

neilparikh• 6 years ago

See for example the Commerce Clause that explicitly grants the Congress the power to regulate interstate trade, yet it is used as a basis to justify intrastate regulations (e.g. drug prohibition).

If anyone is curious, this is due to Wickard v. Filburn (https://en.wikipedia.org/wiki/Wickard_v._Filburn), a very unfortunate Supreme Court decision made in 1942. This decision was cited as precedent in Gonzales v. Raich (https://en.wikipedia.org/wiki/Gonzales_v._Raich)

ramblerman• 6 years ago

It seems strange to me to fight corruption and fraud by creatiung an even larger institution with more cash to manage.

Kronen2• 6 years ago

What details?

The investigator said in some states fraudsters need only to submit someone’s name, Social Security number and other basic information for their claims to be processed.

This is the problem, a complete lack of security. Why doesn't the US use an electronic signature supported by a digital certificate as we do in Europe?

xerox13ster• 6 years ago

Has there been a real profitable incentive to implement the technology? Then why spend the money for a risk that may not have an impact tends to be the mindset.

moduspol2• 6 years ago

I am not surprised this is happening. The small offices in each state are responsible for 100s of millions of dollars and they awfully unequipped for it.

But trust us when we tell you that voter fraud isn't happening, that mail-in ballots offer no increased risks, and that non-citizens aren't voting.

OldHand2018• 6 years ago

Every piece of mail must enter the system and be postmarked correctly. The US postal service certainly will not accept or deliver a piece of mail with a "Miami Beach, FL" postmark addressed to the "Sacramento Board of Elections" if it comes in with a batch of Par Avion mail off a plane from Nigeria.

You understand that the standard ML training data for OCR is from the US postal service, right? They've been routing mail electronically for decades.

The election system in the US is ridiculously decentralized, which makes it really hard to commit large-scale voter fraud at the ballot level.

tres• 6 years ago

[Citation Needed]

Not that it's either relevant or germane to a discussion regarding an organization using stolen identity to wire funds electronically.

Multiple states have been using mail-in ballots for literally decades. No widespread voter fraud has ever been reported.

Here's an anecdote for you: a few elections back, my signature didn't look quite right on the envelope of my ballot. Got a call from elections officials to verify that I had in fact filled out the ballot.

There's a lot more control involved in mail-in voting than there are in fraudulently filling-out an online form and receiving an electronic funds transfer.

ipnon4• 6 years ago

My friend's desperately needed unemployment funds are frozen because they were requested using a Romanian IP address. My friend has never been to Romania nor spoofed their IP in such a manner. The New York state unemployment website seemingly allows no recourse for this incident. They are now unemployed and unable to receive any income.

marcinzm2• 6 years ago

The recourse as I understand it is to try and call the agency to speak to a person. Of course the call systems are overloaded so that's easier said than done.

edit: This is the general approach by US agencies, the IRS website barfed on my info and I had to call a local office to get a person to help me (the nation wide number was 100% automated and likewise barfed on my info).

trynewideas• 6 years ago

Good luck: https://www.oregonlive.com/business/2020/04/oregon-insight-h...

Laid-off workers are confused and confounded by the department’s faltering claims system, erroneous denials and stubborn silence on key policies and questions.
The frustrations lead people to call the department again and again – some say they dial more than 700 times a day.
The employment department is taking steps to address the call volume. It has added hundreds of staff to process claims in recent weeks – it has 520 now and has leased a facility in Wilsonville to expand claims staff to 800.
With jobless claims up nearly seventeenfold, though, the staffing increases aren’t close to keeping up with demand. So it may be weeks – or months – before Oregon works through its backlog in claims questions.

ken• 6 years ago

Calling the unemployment office right now is virtually impossible.

Conventional wisdom these days is that if you want to collect unemployment, you need to make filing a claim your full-time job. You start calling at 7am when they open, and keep re-dialing until you get through -- hopefully before they close at 4pm, and you have to start again the next day.

Also, don't call before Wednesday, if you don't absolutely need to. Monday/Tuesday are unofficially reserved for people who really need the money.

Of course, even if you get through to a person and get the right bit flipped in their database, there's no guarantees. I also hear lots of stories of people whose claims were approved 4 or 6 weeks ago and still haven't gotten a dime.

pdq• 6 years ago

Maybe they were using a VPN proxy?

ipnon4• 6 years ago

They were using a VPN that was exiting in New York City and had never exited from Romania.

nikanj• 6 years ago

Once upon a time our office IP in Helsinki was tagged as being in Spain by some geoip provider. For months parts of the internet were in Spanish. No way to fix this from our end. For example, googling for any php function automatically linked me to the spanish version of php.net.

After a few months, the issue disappeared as mysteriously as it had appeared. And we'd had that set of static IPs for about 5 years by that point.

ipnon4• 6 years ago

It's a shame that such technical problems can become severe personal problems in times of crisis such as these.

icegreentea2• 6 years ago

I wonder what the rate/total volume (or detected volume) of fraud is? How does it compare to baseline levels of fraud? The article says the amount of fraud has kept pace with dramatic increase in claims in Rhode Island. If it's just keeping pace, why are we surprised? Do we even need to worry that much? Is the current situation making it easier to commit fraud? Or is it just generating more volume and noise to hide fraud in?

llarsson• 6 years ago

Well, if I am employed in one state, that means I am unemployed in almost 49 others, doesn't it? Time to fill out some paperwork!

For certain things, this perhaps one of them, there are benefits if handled on a federal level with more oversight.

pbhjpbhj5• 6 years ago

You wouldn't need to handle it centrally, you could do something like log all "single-state" transactions against a name, SSN, & bank account, and publish to reach of the other states your data -- preferably through a federal data store, but it could still work otherwise?

unishark4• 6 years ago

Is that all it takes to get unemployment now? Just an application and they take your word for it? I thought you needed to get legitimately laid off (i.e. not quit or be fired for cause) by an employer in the state who notifies the state of this fact for you, and perhaps who has to pay part of your benefits.

And there's always both upsides as well as downsides to handling things federally versus state.

bpodgursky• 6 years ago

Doesn't surprise me in the slightest, given that two days ago someone in Michigan attempted to use my wife's info + email to get unemployment benefits. We live in Seattle, never lived in Michigan.

Managed to file a fraud claim in this case, but only because they happened to use her email address for some reason.

feross• 6 years ago

Duplicate: https://news.ycombinator.com/item?id=23200553

bluedino• 6 years ago

This pairs well with the high amount of income tax return fraud.

Basically, someone files your taxes for you and steals your refund check.

MattGaiser4• 6 years ago

That explains why I see so many "volunteer" tax preparers on various sites.

canada_dry2• 6 years ago

In context of how much "personal identifiable information" (e.g. SSN) that is stolen through data breaches in the USA - it's hardly a surprise.

The list of breaches just goes on-and-on: https://krebsonsecurity.com/category/data-breaches/

TeMPOraL• 6 years ago

that is stolen

Or just straight up sold by the government: https://news.ycombinator.com/item?id=20438289.

canada_dry2• 6 years ago

... or collected by state prison call centers and misused (though admittedly this would be a minute fraction in comparison).

https://www.cio.com/article/2417888/prison-labor--outsourcin...

asciident2• 6 years ago

I think it's time we just eliminated the concept of personally identifiable information (PII). Your SSN, birthdate, name, etc. are no longer secret. Operate with that assumption. Invest in a department in the government (e.g. digital service) to make this change once and for all. Heck, let's eliminate DST and move to the metric system while we're at it. Let's call this "moving to new standards" that will pay off in dividends in the future.

sp3322• 6 years ago

Why would a bank give someone a loan if they have no idea who the person really is?

marcrosoft• 6 years ago

You had me until the whole “invest in government...”

bradleyjg• 6 years ago

Gee I sure am glad hard working class action lawyers were able to secure me “highly valuable” credit monitoring services after corporate negligence allowed my sensitive information to be stolen.

mostlyjason• 6 years ago

It amazes me that there is no authentication provided by governments in the US to citizens. They just accept a social security number as if it was some sort of password, when it was never intended for that purpose. Other countries give citizens an electronic ID to authenticate themselves. It seems this would prevent hundreds of millions of dollars in fraud and identity theft.

MattGaiser4• 6 years ago

It amazes me that there is no authentication provided by governments in the US to citizens.

Vast numbers of Americans would view that as a big step towards totalitarianism and taking their guns away.

dboreham2• 6 years ago

Except if its about voting and then any amount of intrusion is fine.

forgot_again4• 6 years ago

That's not really true. The Right is generally united on the point of wanting universal ID. Nothing totalitarian about a nation being able to reliably identify and distinguish its citizens.

Unfortunately the political Left believes that such ID, specifically when used as a means of election security, would lead to discrimination.

sershe• 6 years ago

How about making the id voluntary to get, but required to get benefits. Want to get the guvmint out of your life? Sure, then don't ask for unemployment benefits.

mrits2• 6 years ago

Better identification requirements is actually a right wing view in the US. Requiring it is now considered discriminatory.

pugworthy• 6 years ago

Vast numbers of Americans...

Very vocal (and provocative) minority

Spooky234• 6 years ago

They are just loud and there aren’t many of them.

The bigger issue is that people who need services like unemployment and food stamps most have low penetration rates for things like valid government IDs.

bradgessler• 6 years ago

After 9/11 there was an attempt at a national ID card, but it never pans out. https://www.aclu.org/other/5-problems-national-id-cards does a decent job laying out the rationale why it never gets that far.

What we got instead is Real ID, https://en.wikipedia.org/wiki/Real_ID_Act?wprov=sfti1, which is a set of guidelines that States and federal agencies must follow to authenticate people for the issue of their ID and anti-counterfeit features that the ID should have. In other words, the issue was put onto the states.

kingkawn• 6 years ago

If it were harder to scam the social safety net republicans would lose another piece of their argument against making it more comprehensive.

MattGaiser4• 6 years ago

One of the reasons they are happy to cripple it.

https://www.politico.com/states/florida/story/2020/04/03/its...

jonahbenton2• 6 years ago

I am as conceptually socialist and communitarian as they come but there are many reasons for the federal government not to be the identity provider.

It should set the rules (the GOVERNance) by which identity providers provide that service, but it should not itself be in that business.

My favorite way of thinking about it is- the US federal government is a singleton. In any system, you want your singletons to operationalize as little as possible, because they are hardest to change.

Another way- the US federal government is an immortal entity. It represents a perpetual accumulation of all kinds of debt- legal, administrative, technical, financial, whatever. Building and scaling new operational systems within an infrastructure consumed by debt is doomed.

The thing it can do is creating the rules and policies by which a federation of private entities can operationalize a particular need. These entities have limited lifespans, can fail, and have profit and efficiency motives, can compete for business, and are overseen and supervised.

This structure exists in lots of areas, and is more successful in some- banking- less in others- military contracting. But it's vastly preferable to that work being done in the singleton itself.

Cheers.

lolc• 6 years ago

If governments are singletons, what are individuals? Maybe individuals are other objects? And now the individuals don't need to hold a reference to a government service object if they want to authenticate a message they get from another object. They just ask an identity provider object. But which one? Do individuals have a list of identity provider objects? But what if the sender is using another identity provider object they don't have? Ah! The message could contain a reference to an identity provider. But why should the receiving object trust it? Wouldn't it have to ask a government service whether the identity provider is to be trusted? No silly, we don't want a government reference! It could ask other individual objects whether they trust that identity provider object! Then cache the response? Help me out here, how does reputation work?

Seriously though, you're just moving the problem around. Adding complexity. I mean, does an identity provider object still respond to messages when it's entered bankruptcy proceedings? If you're going to use an analogy, find one that informs.

ineedasername• 6 years ago

...debt- legal, administrative, technical, financial...

If you're right, then you can institute devolution of any of those things and the issues you cite are going to build up over time. It will just happen at different levels in because it's spread around some many different systems.

The unemployment issue is an excellent example of this. You want to know the reason why Congress gave a flat $600 to all UI recipients even if it would be more than they were making before? Because there isn't a single unemployment system, there are 50 systems each unique, each with their own "debt", and trying to implement appropriate strictures in all of those systems would have delayed that part of the stimulus for months, if not longer.

The way you deal with those issues is by having infrastructure that is built to deal with the issue. Call it societal/social/legal "garbage collection". Whether or not we have such infrastructure, you don't get rid of the problem by shuffling it around.

Spooky234• 6 years ago

UI is a program geared toward optimizing payment speed, with fraud looked at as something that is addressed via audit. Historically most fraud or bad reporting can be addressed by capturing future benefits.

With the unprecedented load being placed in these systems, you’re going to see things like email and sms used more, which enables new paths for fraud. Pandemic unemployment is also geared towards gig economy workers, which again is a new frontier of fraud.

sp3322• 6 years ago

It removes a lot of friction if you police transactions after the fact. The only trick is to make transactions un-doable if they turn out to be fraudulent.

mdturnerphys• 6 years ago

. . . a substantial amount of the fraudulent benefits submitted have used PII from first responders, government personnel and school employees.

Seems like this should have generated some red flags, as public sector employees haven't been subject to layoffs.

haram_masala• 6 years ago

Makes you wonder if the infamous OPM breach (https://en.wikipedia.org/wiki/Office_of_Personnel_Management...) has been distributed beyond China.

kyuudou• 6 years ago

No wondering, I just assume that's the case. Like, whatever the Chinese equivalents of 4chan and pastebin are would be in constant discussion over the best ways to exploit that information. OPM is a big umbrella over the US Federal Govt. They even got biometric data in the form of fingerprints.

There are certainly worse things to breach but it's basically HR for the US gov't. Imagine your company's HR dept getting totally owned, then people using the CFO's data to get large loans, make harmful business deals or blackwash someone high-profile.

macinjosh• 6 years ago

More like massive fraud against tax payers. The State is part of the problem here, not a victim. Glad the money I earn by laboring is being taken from me (without consent) and literally handed over to criminals.

Edit: I see some of you just down vote what you don't agree with. That is OK it doesn't make me wrong. The state is complicit here in funneling tax payer money to fraudsters due to their own incompetence. This money is being taken out of the hands of those these programs are for. Anyway, I'll stop making you uncomfortable with the truth now.

tehjoker• 6 years ago

Keep in mind the fraud is in the hundreds of millions and the size of the program is in the hundreds of billions ($260B from the CARES act alone: https://www.nelp.org/publication/unemployment-insurance-prov...)

brentonator• 6 years ago

I'll use the food stamps argument: All I see is millions and regardless of how insignificant that number is with regard to how many the program has helped, I'm going to argue the whole program should be shut down because my party says so and uphill bootstraps.

If it's 200M of fraud that's less than a percent. I don't think you can safely say less than 1% of Americans have had their identities stolen so they've done a hell of a job if you ask me.

mensetmanusman• 6 years ago

People should look at this as a business opportunity.

Look, states are losing tens of millions of dollars a year in fraud. I bet they would pay many millions to prevent it with smart data analysis and red flagging...

Nextgrid• 6 years ago

But it will be outsourced to some bullshit consultancy that will take 10x the initial budget and end up not delivering anything.

asciident2• 6 years ago

True, but part of this higher cost would also be to handle all the "requirements" from the government from years of accumulated desires from the people (accountability, supporting minority owners, prioritizing US suppliers, hiring veterans and the disabled, reporting sexual harassment, etc.). In the end, it's all one big cycle with each part blaming another, when in reality this is roughly the best we can do with a system where everyone acts in their own self interests and agency.

In such a system, doing anything takes a lot of time and money. Look at extending subway lines in NYC. The unions, negotiations with property owners, environmental regulations, etc. also impose a major cost and roadblock. Not saying these are bad things to support, as we do want those things, but we should recognize that each of these requirements reduces efficiency (probably exponentially).

chrischen2• 6 years ago

That’s funny because my dad has been struggling to get unemployment due to state bureaucracy (he was working remotely for a company in another state, which complicates the filing). I guess the same bureaucracy is probably what enables the fraud.

mixmastamyk2• 6 years ago

If you pay taxes in the state, shouldn’t it be enough?

chrischen2• 6 years ago

Yes he is entitled to it. The problem was that it was unclear which state he was supposed to file in (because he works remotely out of state), and one state's department just said to go to the other state.

raverbashing2• 6 years ago

The ironic part of this is the spam comment (that was not removed from there on purpose) and most likely is one gear of this fraud system

pnw_hazor15• 6 years ago

The true scope of the fraud will come clear when IRS starts coming after the named beneficiaries of the fraudulent disbursements.

In WA state (not sure about other states), the unemployment insurance agency does not automatically withhold taxes from disbursement checks. (It is an option the beneficiary can choose).

The IRS will come looking for those taxes.

cgb223• 6 years ago

Wow Nigerian Scammers have really kicked it up a notch since the “Prince of Nigeria” days

fortran77• 6 years ago

Every time our Government wants to help people with cash payouts, there's always massive fraud. You'd think they'd learn.

scroot• 6 years ago

It's almost like decades of governance by people who say government is the problem leads to ... inept governing ...

relativitypro• 6 years ago

I guess the equitax data breach will lead to real consequences. Just not for equifax.

ItsAlwaysMe2• 6 years ago

I received a letter on May 8th telling me that I applied for unemployment benefits... but of course I did not. I am also in WA state. I filed a fraud report, so we'll see how it goes. So incredibly frustrating...

finnh2• 6 years ago

Me too, I just got one (although it wasn't saying I applied, it was just referring to my "claim #" and telling me about a retraining opportunity). Where did you file your fraud report? I've been meaning to but haven't figured out where to call yet.

ItsAlwaysMe2• 6 years ago

I had the same opportunity letter, something about entrepreneurship but also referenced a claim number.

Here's the link: https://esd.wa.gov/unemployment/unemployment-benefits-fraud

hilyen• 6 years ago

If only we saw this coming.... oh wait... Equifax's data breach of 143M records.

People have been calling for social security number system to be updated. In what world does it make sense to prove your identity with just a username (ss #) and not a password as well?

joncrane2• 6 years ago

Interesting that it's the banks that are catching this.

I know we trash banks, and they do some terrible things to customers, but they have become important partners in fighting financial crime including AML (Anti Money Laundering) and other crimes.

I'm sure some banks are using ML to detect anomalous transactions, and I wouldn't be surprised if one or more ML models are what first flagged this activity as suspicious.

WalterBright3• 6 years ago

I'm not surprised this is happening in Washington State. Here the voter registration requirements are writing a name on a piece of paper, here's your ballot.

But no voter fraud is ever detected. Hmmm.

CydeWeys2• 6 years ago

Source for voter fraud happening at a meaningful level in WA?

WalterBright3• 6 years ago

When no verification is done, how can fraud even be detected?

WaxProlix• 6 years ago

This has nothing to do with voter fraud, and how easy or hard it is to register to vote doesn't seem to bear on the topic.

WalterBright3• 6 years ago

When they send out ballots with literally zero checking to see if the recipient is an actual person, that sounds a lot like what is happening with the unemployment benefits.

memset• 6 years ago

Interestingly, there is exactly one top-level comment right now on HN. (Now there are two.) That comment, and the ensuing thread is about buying pseudoephedrine. How does this relate to fraudulent unemployment insurance claims?

billme• 6 years ago

No, there is not just one top-level comment. Minimize that comment, then click “more” to see additional top-level comments.

As for the comment you commented on, that comment would be better placed as a child comment, but it’s about interstate commutation issues, which clearly relates to the topic.

ejz• 6 years ago

Indeed. This complex Nigerian crime ring is best known as PRINCE.

bhewes• 6 years ago

Ah this is what happened to the lady I faxed stuff for at the UPS Store. That sucks.

paul7986• 6 years ago

All monies from stimulus to unemployment should've and should be directed right into taxpayer's bank accounts; those who made less then 75k last year instantly get the funds. If they are not needed up to the discretion of each person to do the right thing or not.

The unemployment system was a terrible choice with it's antiquated technology systems and no surprise tons of fraud going to scammers while many Americans still haven't gotten their funds to survive on.

gknight2• 6 years ago

Pardon my ignorance: Could someone explain to me why this is under the purview of the Secret Service?

arrosenberg• 6 years ago

It's a bit of a historical oddity, but the Secret Service is responsible for policing counterfeiting and wire fraud. When the USSS was founded in 1865 there was no federal police agency (other than USPIS I believe), so they handled that particular crime and no one has taken the jurisdiction away from them.

https://www.secretservice.gov/investigation/

gknight2• 6 years ago

Why I love HN. Thank you!

exabrial• 6 years ago

Brought to you by Equifax!!

andreskytt• 6 years ago

This is a political choice. By choice, the identity system in US is broken. Therefore, it will be used for personal gain. And fraud scales well with technology.

Fjolsvith• 6 years ago

Could it be possible that the unemployment numbers being reported in the media are larger than the actual number of people unemployed at this time? As in, the economy isn't really in as bad of shape as we are being led to believe.

unnouinceput• 6 years ago

Quote: "The Service’s memo suggests the crime ring is operating in much the same way as crooks who specialize in filing fraudulent income tax refund requests with the states and the U.S. Internal Revenue Service (IRS), a perennial problem that costs the states and the U.S. Treasury hundreds of millions of dollars in revenue each year."

A perennial! problem, hundreds of millions each year. It blows my mind how 80+ years later SSN is still used as identity, far beyond its original purpose. I mean with only one year of those losses US gov. could easily adopt something better.

unclebucknasty• 6 years ago

It's crazy that we all walk around with some secret number that, if discovered, could wreak havoc on our lives.

This is especially true in this digital age of connectedness and breaches, wherein we're encouraged to use and share the number ourselves in some scenarios, but somehow expect it to not fall victim of a single error or act of malice.

Angostura• 6 years ago

It's crazy that people use it and think of it as secret number.

Dobbs3• 6 years ago

The Dutch system to this is pretty nice. Your BSN gets attached to a digital id (DigiD).

You might give your BSN out to a company (healthcare, doctor, etc) but that is used to create the link to your DigiD. From there if you want to login to something like your healthcare company it will then bring up a form where you copy four characters from your DigiD app on your phone. This makes sure the requests match, then you just scan a QR code and type in a pin.

So if you want to login to do something related to your taxes, or healthcare online you have very strong two factor auth.

Additionally banks work similarly for making payments or purchases online. I want to order a pizza for delivery online it redirects me to a payment page on my banks website. I then take out my bank app on my phone, type in a pin, scan a QR, and approve the payment.

rbanffy3• 6 years ago

it will then bring up a form where you copy four characters from your DigiD app on your phone

What happens when you don't own a phone?

pc86• 6 years ago

Are elderly Europeans just so much better at tech than elderly Americans? Smartphone apps. QR codes. 2FA pins.

I know folks in their 60s who positively would not be able to do any of this with any level of success.

charwalker• 6 years ago

I wonder, like, how much of that (and legitimate tax revenue) could be recovered or prevented each year by properly funding the IRS and other departments.

Where is the outrage compared to that of welfare queens, which don't exist in high numbers?

mirekrusin• 6 years ago

Jokes aside, blockchain w/zero knowledge proofs could actually help here a lot.

austinheap• 6 years ago

I'm already on the hook for fixing the in-laws WiFi, printer, and IoT cat water bowl -- how could this possibly scale to the masses?

Melting_Harps• 6 years ago

I'm already on the hook for fixing the in-laws WiFi, printer, and IoT cat water bowl -- how could this possibly scale to the masses?

IoT cat bowl? Leave it out...

As for how it'd scale, I'd say a look to the past would suggest that much like we saw with COVID, every State takes an initiative to deploy it [1] based on each departments need [2]. Hell some States have their own mining operation they were able to fund through some work/jobs program, and were able to get it funded through tax money.

Personally, I tuned out when people at our local meetup were pushing for this: it seemed like government lobbying and I have no interest in pandering to politicians so I stopped listening--my co-founder was doing enough of that for her other ventures and I felt disgusted just asking her about it, let alone doing it myself.

But if I recall correctly, they did manage to pilot test it. Its just that, while I advise everyone to pay their taxes, I hardly see the novelty or utility in pitching politicians to see this tech as a viable means to collect taxes. Especially since the actual talent in this space is already spread far too thin, as it is.

These were ETH guys, so being the Bitcoin guy (maximalist, as they often called me) in the room I didn't want to see needless bloat on the network (after 2017 we all had main-net tx paranoia) so never really bothered to ask any further questions.

1: https://statescoop.com/colorado-lawmakers-push-for-blockchai...

2: https://choosecolorado.com/blockchain/

drawkbox2• 6 years ago

Direct payments are better for this very reason. They also become bonuses for those working. Banks and broken state systems have really caused problems getting stimulus out as expected.

Lots of people calling for temp UBI like Cuban [1]. It was obvious from the beginning we needed this.

With everything we learned from the Great Recession 'bailouts/stimulus' we should have expected this and just not gone the bank route or unemployment alone. Direct payments takes pressure off everything, unemployment, state budgets, individuals, mortgage/rent, small business, demand from purchasing power etc.

[1] https://www.marketwatch.com/story/mark-cuban-says-families-s...

cat199• 6 years ago

how would a buggy implementation of payment dispersal relate in any way to any perceived need for UBI?

drawkbox2• 6 years ago

I didn't say buggy, I said broken, sometimes on purpose.

In "Study finds 44% of U.S. unemployment applicants have been denied or are still waiting" it shows the systems don't work [1]. This is one article, study or example in many, many reports on this.

Direct payments, at least during the crisis and maybe auto UBI during recessions, would make it to everyone, not prevent people from weighing going back to work, not overload state budgets, reduce unemployment, and more. Some systems like Floridas were meant to not really work at all to minimize usage.

Basically anyone in a state with a bad unemployment state system suffered. Direct payments gets around all that by using identity and tax system information.

Direct payments to everyone also get past the whole idea of selective stimulus. Money to everyone gets to where it needs to be that no central planning could ever predict from food, gas, housing, insurance, health, etc [2].

Direct payments during recessions would make the floor higher and bring back purchasing power demand sooner, or keep it with some semblance of consistency in times like this.

[1] https://www.cnbc.com/2020/05/15/44percent-of-us-unemployment...

[2] https://www.cnbc.com/2020/04/15/coronavirus-stimulus-checks-...

US Secret Service: “Massive Fraud” Against State Unemployment Insurance Programs

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