Reason Roundup

Massive Unemployment Spending Attracts Scammers and Criminals

Plus: North Carolina passes cause-based abortion ban as Missouri's gets struck down, conservatives would hate treating social media as common carriers, and more...


As much as half of money doled out through pandemic unemployment benefit programs may have gone to scammers, says Axios. "Unemployment fraud during the pandemic could easily reach $400 billion," it adds, "and the bulk of the money likely ended in the hands of foreign crime syndicates."

That's an insanely high—and disturbing—estimate, as well as one that seems to vindicate the worst fears about fraud in U.S. unemployment insurance programs.

It's also pretty thinly sourced, coming from one dude— CEO Blake Hall—with a vested interest in fearmongering around identity theft. His company is in the business of online identity verification. ("I asked for more specific information and they sent me an argument in favor of their product—which helps verify claims," notes CNN's Zachary B. Wolf.) In addition, one other source—Haywood Talcove, also from a fraud prevention company (LexisNexis Risk Solutions)—told Axios that much of the stolen money ended up in the hands of crime syndicates in China, Russia, Nigeria, and other foreign countries. It's unclear how either source arrived at these estimates.

But that's not to say some serious fraud hasn't taken place. A significant amount of anecdotal evidence does lend credence to their claims. Just last month, "a Nigerian man suspected in Washington state's $650 million unemployment fraud was arrested" trying to flee the country, Seattle Times reports:

Abidemi Rufai, of Lekki, Nigeria, appeared in federal court Saturday on charges that he used the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department during the COVID-19 pandemic last year.

Earlier this week, "the U.S. Attorney's Office announced 64-year-old Delma Ruth High pleaded guilty" to unemployment fraud, reports. "According to prosecutors, a local bank alerted the U.S. Secret Service's Jackson office in May 2020 that unemployment insurance benefits from the state of Washington and Arizona had been deposited into High's account under other people's names."

Also this week, "a 28-year-old man suspected of committing identity theft to fraudulently collect hundreds of thousands of dollars in unemployment benefits" was jailed, says NBC Palm Springs. "It's believed the suspect stole as much as $316,500 in unemployment benefits from the California Employment Development Department."

Between January and May 2021, the Texas Department of Transportation "received 529 fraudulent unemployment claims filed using stolen identities of employed TxDOT workers," according to KXAN.

And these aren't the only recent examples of such fraud. While the precise extent of unemployment benefit theft may be hard to pin down, there's clearly a significant amount of it happening.

White House economist Gene Sperling blamed lack of oversight by the Trump administration for the fraud. He told Axios that concerns about it were "why we passed $2 billion for [unemployment insurance] modernizations in the American Rescue Plan, instituted a Department of Justice Anti-Fraud Task Force and an all-of-government Identity Theft and Public Benefits Initiative."


Cause-based abortion bans keep coming and courts keep striking them down. North Carolina is banning abortion based on race, sex, or Down syndrome diagnosis. Similar bills have been signed into law—and declared unconstitutional—in a number of other states. A federal appeals court ruled just this week that a similar ban in Missouri was unconstitutional. However, an appeals court in April upheld a similar ban in Ohio.


Republicans want to declare tech companies common carriers, but they would hate the results. "More and more conservatives critique social media by arguing that websites like Facebook, Twitter, and Google are effectively the modern public square that shouldn't have moderation practices built to balance online safety and free speech," writes Kir Nuthi at Techdirt:

So it's only natural that a proposal like common carriage gained traction in the Trump presidency and has not lost momentum since. Just look at Sen. Hagerty's 21st Century FREE Speech Act.

Some conservative critics think treating these sites as common carriers ticks many of their boxes—less content moderation, less alleged anti-conservative bias, and more regulation of America's tech companies. But they're wrong. Not only is it an unconstitutional solution, its design to work around First Amendment jurisprudence will almost certainly make the internet worse, not better, for conservatives.

[…] Nondiscrimination is a central feature of traditional common carriers, but it is not a feature of social media. Unlike the railroads and communications companies of the Gilded Age, social media relies on the ability to contextualize and discriminate between different content to provide useful information to users. Content moderation is at the center of that, providing websites the ability to balance free expression and online safety to maximize both and make the internet somewhere we want to spend time. Concerned parents shouldn't have to wade through expletives, references to violence, and sexual content just to connect with their friends and family as well as protect their kids online.

The ability to moderate is a feature, not a bug, of social media.


• More people worldwide have died from COVID-19 so far in 2021 than died from the disease in all of 2020.

• Two people on the first U.S. cruise ship voyage in more than a year have tested positive for COVID-19.

• Paul Krugman's 10-year history of being wrong about Bitcoin.

• California will appeal a federal court ruling striking down its ban on "assault weapons."

• A new report from the American Civil Liberties Union brands Pennsylvania's General Assembly a "bipartisan criminal offense factory." In 2019-2020, the state legislature "introduced 280 new bills […] resulting in 15 new offenses and suboffenses, passed with bipartisan support that imposed 26 new penalties," notes the Pennsylvania Capital-Star.

• "Authoritarianism without borders":

• Are Republican governments turning against needle exchanges?

"The Labor Department says consumer prices rose 5 percent for the 12-month period ending in May," notes NPR. "That's the sharpest increase since August 2008, topping the 4.2 percent rise seen in April."