Foreign hackers linked to the Chinese government allegedly stole at least $20 million in COVID-19 relief funds, according to the U.S. Secret Service.
The China-linked hackers, known as APT41, are “a notable player” among the 1,000-plus investigations into criminals defrauding public benefits programs, according to an NBC News report confirmed by the Secret Service to the Daily Caller News Foundation.
It is unknown whether the Chinese government directed APT41 to steal taxpayer funds or simply looked the other way, but the threat is “dangerous” and has serious national security implications, an anonymous senior Department of Justice (DOJ) official told NBC News.
“I’ve never seen them target government money before,” John Hultquist, head of intelligence analysis at the cybersecurity firm Mandiant, told NBC News. “That would be an escalation.”
The discovery of the hackers could be just the beginning, as unnamed officials and experts think it is likely that the hackers targeted all 50 states, according to NBC News.
The experts and officials noted that other reported instances of COVID-19 fraud point back to foreign state-affiliated hackers.
“It would be crazy to think this group didn’t target all 50 states,” Roy Dotson, national pandemic fraud recovery coordinator for the U.S. Secret Service, told NBC News. The report marks the first time the U.S. government has publicly acknowledged that state-sponsored cybercriminals stole pandemic relief.
Currently, the Labor Department (DOL) Office of Inspector General reports that roughly 20 percent of the $872.5 billion paid in pandemic unemployment funds were improperly paid, but other officials from multiple agencies believe the number is much higher, according to NBC News.
During an analysis of four states, the DOL’s watchdog reported to Congress that over 42.4 percent of pandemic relief funds were improperly paid over the first six months.
An analysis of the DOL’s data by the Heritage Foundation shows that $350 billion in excess unemployment payments were handed out from April 2020 to May 2021. Furthermore, over a single year, identity theft reports increased “27-fold,” going from 23,000 to 637,000, as hackers eyed government payouts, according to the Heritage Foundation.
“My analysis of the Department of Labor’s data shows that UI programs sent out 1.365 billion weekly benefit checks between April 2020 and May 2021 when covering 100 percent of all unemployed workers — an optimistic goal of the UI expansions — would have required only 807 million benefit checks,” Heritage Foundation fellow Rachel Greszler said while testifying in front of the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
“So that’s an excess of 557 million UI checks and $357 billion of taxpayers’ money sent to people — likely criminals — who weren’t unemployed,” Greszler continued.
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