Paul Roberts / The Seattle Times
A New Jersey bank has agreed to return nearly $ 500,000 of accounts believed to have been used in last year’s $ 650 million unemployment fraud in Washington, DC’s attorney general’s office said on Friday. State.
But the money – $ 495,937.70 – from TD Bank is only a fraction of what the thieves initially transferred to the bank via bogus unemployment claims filed in Washington state, have said AGO officials.
An additional $ 4.2 million that was transferred to dozens of TD bank accounts by the state’s job security department had likely already been withdrawn by crooks before bank officials became suspicious and do not freeze accounts, AGO officials said. TD voluntarily returned an additional $ 1.3 million.
TD Bank’s partial takeover is the first in an intensive 15-month AGO investigation of 37 banks where crooks allegedly filed stolen unemployment benefits in Washington during the chaotic first months of pandemic layoffs.
The AGO’s investigation, which is separate from a federal effort that has already returned nearly $ 380 million to Washington state, aims to recover some of the roughly $ 270 million still owed.
“My legal team uses every tool in our toolkit to recover the stolen dollars,” Attorney General Bob Ferguson said in a statement Friday. “Stay tuned because we are not done.”
But if the TD Bank result is any indication, the AOG investigation will likely only recover some of that overdue money, due to withdrawals made by crooks before banks freeze accounts, officials said. AGO.
As of Friday evening, officials were unable to provide a figure for the total amount of unemployment benefits that ESD is known to have wired to suspicious accounts at all 37 banks.
“TD takes fraud very seriously and we are fully cooperating with Washington State in this matter,” a TD Bank spokesperson said in an email response to questions on Friday. “We have no further comment.”
The AGO launched its clawback investigation in July 2020 to complement federal clawback efforts, which had primarily focused on working with financial institutions to voluntarily return unemployment benefits that had been identified as stolen in Washington. TD Bank, for example, had already voluntarily returned $ 1.3 million, AGO officials said.
AGO’s recovery efforts, by contrast, focused on cases where banks were to be forced by a court order to confiscate the funds. One reason for the states’ different strategy is that Washington state’s confiscation law allows for faster recovery than federal confiscation laws, AGO and federal officials said.
AGO investigators began by analyzing around 96,000 unemployment claims that ESD had already identified as fraudulent. The AGO then subpoenaed 37 banks that had received wire transfers from ESD on behalf of these suspicious claims, and examined those accounts for other indicators of fraud.
These indicators included the payment of unemployment benefits from several states; receive payments on behalf of multiple applicants; and inconsistencies between the name on the bank account and the names on jobless claims, AGO officials said.
King County Superior Court Judge Johanna Bender on Thursday signed a forfeiture order directing TD Bank to “deliver” $ 495,937.70 to Washington, which AGO officials expect. see it happen in the coming weeks.
Others will follow, AGO officials said.
“There are banks where we will get a lot more money than we get from TD Bank,” said Deputy Attorney General Jeffrey Sprung, who led the AGO investigation.
AGO officials had no formal estimate of what they expected to recover from any accounts reported as potentially fraudulent at the 37 banks. While approximately 30% of funds sent to TD Bank will have been recovered, the final percentage will largely depend on how quickly individual banks have frozen accounts once fraud has been suspected.
Another unknown: the AGO will also ask banks for information on accounts that received unemployment funds that the banks themselves had independently reported as potentially fraudulent, but which may not have been included in the list of suspicious claims of the D.
If those additional accounts also contain fraudulently obtained benefits, the state will push for those funds to be confiscated, which could increase the total amount recovered – as well as the total amount stolen.
However, AGO officials declined to speculate on the amount of additional unemployment benefits that might be contained in these accounts.
AGO officials said they had few details on who filed the fraudulent claims or opened the bank accounts. However, they said the claims related to TD Bank accounts were unrelated to the cases of three people indicted earlier this year by federal prosecutors, including two Nigerian citizens and a former Moses Lake ESD employee.
In a statement on Friday, ESD Commissioner Cami Feek said the agency “remains committed to recovering every penny of possible stolen unemployment insurance funds. We greatly appreciate the tireless efforts of the attorney general’s office. and other law enforcement agencies to hold these criminals to account and send those dollars back to the program.