FBI Buffalo investigating potential unemployment benefits fraud scheme

Posted at 11:43 PM, Jun 18, 2020
and last updated 2020-06-22 14:43:28-04

BUFFALO, N.Y. (WKBW) — A potential fraud scheme involving New York State unemployment benefits is now being investigated by the FBI both in Buffalo and Rochester. Alongside both state and federal labor departments, FBI Buffalo said cases are being identified mostly by essential employees in Ontario, Monroe and Erie counties.

“This is the perfect storm,” FBI Buffalo Public Affairs Officer Maureen Dempsey said.

Data from the New York State Department of Labor website, shows over 13 weeks, almost three million initial unemployment claims in the Empire State were filed including more than 190,000 in Western New York.

“As sad as it sounds, these workers are being exploited for working hard and continuing to do their jobs during a pandemic,” Dempsey said.

Right now, it is not known just how many Western New Yorkers are impacted, but Dempsey said dozens already came forward.

“It’s very unsettling. Just to think that somebody is just out there looking for individuals who are still working,” Anthony Milone said. He is Vice President and a partner at Occhino Corp. in West Seneca and also an essential worker. Earlier this month, he said he became a victim of unemployment fraud. He reported it both to the Department of Labor and FBI Buffalo.

“I had figured that something had been compromised. It was just now a matter to stop any payments and to prevent any of our personal accounts to also be compromised,” he said.

Milone first got an employment verification letter for state unemployment benefits two weeks ago at his office. That same day he received another letter and a debit card from the Department of Labor in his home mailbox. Both letters detail his personal information for unemployment benefits dating back to March 16th.

“Your privacy has been invaded so you just don’t know what else has been taken,” he said. Milone reached out to 7 Eyewitness News after seeing a story earlier this week about a Cheektowaga nurse in the same situation. Both agree they are frustrated with the lack of communication from the labor department.

“If this fraud goes through using that information that someone was able to acquire previously…they’re going to have money that the Department of Labor showed it was paid to them. In the following year they’re going to have to claim it as income [on a 1099],” she said.

Dempsey added FBI Buffalo was on the lookout for any fraud after unemployment fraud schemes started to pop up in other states. She said it is too early in the investigation to know exactly where and how these criminals may have gotten personal information.

“For the FBI, we kind of really want to get a hold of how wide this fraud is, who’s involved and try to prevent similar frauds from happening in the future,” Dempsey said.

For those that received a debit card with benefits, FBI Buffalo would like to collect it for evidence and ask people in this situation not to destroy or use it. Anyone that may have been a victim of unemployment fraud is asked to report it immediately to both FBI Buffalo and the state labor department.

A New York State Department of Labor spokesperson said it “cannot comment on specific cases and/or investigations.”

On Monday, New York State Republican Assemblyman Steve Hawley released a statement in regards to the potential scam. He asked the public to "remain vigilant and responsible." The assemblyman also asked the public to report anything suspicious to the New York State Department of Labor either online here or by calling 888-598-2077, FBI Buffalo and also the New York State Police Troop A Headquarters at 585-344-6200.