Nigerian citizen arrested in unemployment fraud to be released on bail

May 21, 2021, 2:43 PM | Updated: May 24, 2021, 11:01 am

unemployment, insurance rates, fraud...

(Photo Illustration by Justin Sullivan/Getty Images)

(Photo Illustration by Justin Sullivan/Getty Images)

In a reversal of his decision earlier this week, a federal judge in New York City decided to allow the Nigerian citizen arrested last week on suspicion of stealing $375,000 from Washington’s Employment Security Department to be released on $300,000 bail, pending a Tuesday appeal by the Western District of Washington.

Earlier this week, the same judge had denied bail to Abidemi Rufai, who is an appointed government official in Nigeria.

Suspect in unemployment scam denied bail pending arrival in Washington

This comes right as the Employment Security Department announces that for the second May in a row, it was hit with a fraud attack — though this year, it appears the fraudsters were not successful.

To meet the conditions of his release, Rufai must stay at the home of a family friend in New York, where his location will be monitored at all times with an ankle bracelet. He is barred from traveling outside of New York City (and, eventually, the Western District of Washington, where he will be brought for trial). Government officials can check up on him at any time to make sure he is following the rules; if he disobeys, he can be detained again.

Still, the U.S. Attorney’s Office for the Western District of Washington is appealing the judge’s decision because it considers Rufai to be an economic danger to the community after “what may have been the largest fraud ever against the Washington state government,” according to court documents.

“Justice requires that Mr. Rufai face these charges in the Western District of Washington,” the U.S. Attorney’s Office told KIRO Radio in a statement. “The government will take all necessary steps to ensure that occurs.”

Federal attorneys also see Rufai as an extreme flight risk, and worry that despite the restrictions imposed on him, he may try to get back to Nigeria. In court documents, they note that Rufai has every reason to want to go back home — not only because his wife, children, and governmental career are there, but also because he faces possibly decades of prison time if he is found guilty and convicted in the United States. In fact, Rufai was about to board a plane home at New York’s JFK International Airport last week when he was arrested.

While Rufai’s travel documents have been seized, federal attorneys say he has a history of forging identity documents, and could possibly have a fake passport made. They also observe that he was traveling with items of significant value, suggesting that he may have the financial means to escape.

“It would be a more difficult situation for the government to pursue were he to return home,” Emily Langlie, communications director for the U.S. Attorney’s Office of the Western District of Washington, told KIRO Radio. “Then we’d have to start the whole extradition process.”

Attorneys say in the court documents that if Rufai does make it back to Nigeria, he “likely will be gone forever,” noting that extradition is tough enough with Nigerian citizens, let alone high-ranking politicians.

“Extradition would be difficult — in part because he is a government official there,” Langlie said.

The Employment Security Department’s new anti-fraud director hopes that this doesn’t happen because he believes Rufai may be able to give investigators information about some of the other criminals involved in the massive attack.

“I’m confident that he is connected to a larger ring and has other players involved in this,” Fraud Chief John Snodgrass said.

Improvements to prevent fraud at ESD

Meanwhile, ESD says it was recently able to stave off a second fraud attack because the improvements put into place since the last fraud attack are working.

In the second week of May, ESD saw a dramatic spike in new claims — which gave them pause.

“Starting on [May 6], we started to see an increase of roughly 158% of new claims — not necessarily bad — but new claims coming in, which was enough of a percentage for us to take notice of,” Snodgrass said.

Of the thousands of new claims that came in, the system initially flagged 76% as suspicious. A few other possible fraud cases were caught when staff manually went through the claims.

Snodgrass doesn’t believe any of that money went into criminals’ hands.

“At this point, I have not seen any paid out to fraudsters. … I have not seen any figures that support any money was paid out. We have caught the large majority,” he said. “Can I ever say 100% of fraud was caught? I don’t think anybody could ever say that. But I will say that the numbers at this point do not appear noteworthy.”

New audit reports find that Employment Security failed to protect against fraud

He credits the prevention to the reforms made since last year’s attack. In its performance audit of ESD earlier this year, the State Auditor’s Office laid out several different mistakes made by ESD that likely contributed to the criminals’ success, but noted that the department had already taken action to turn these failings around.

“We make no additional formal recommendations, but strongly encourage ESD to continue its efforts to address these issues,” the report said.

Some of the improvements made include creating an anti-fraud unit, and hiring more than 100 anti-fraud staffers — including Snodgrass’ position as fraud chief. This was an increase of more than 500% — previously, there were just 26 people working to detect fraud.

“We have built up our fraud analytics team, spending more time looking into trends, developing mitigation strategies, and implementing those controls within our systems,” Snodgrass said.

He added that they’re constantly updating their filters and automating the system so trends can be found faster. They look for trends like claims coming from the same email domains or the same IP addresses. Snodgrass said some of the ways in which fraudsters are trying to get in are similar to what they did last year — except this year, the criminals are realizing those methods are not working and giving up quickly.

“I would not say that it is entirely a new group of people,” he said.

While the IP addresses this year all appear to be domestic, Snodgrass noted that it is possible to hide or disguise an IP address, so the current group of fraudsters could be connected to last year’s Nigerian ring.

The State Auditor’s report noted that between $650 million and $1 billion were stolen in last year’s attack. However, ESD says the $1 billion figure is inflated and inaccurate because it includes claims that were found to be legitimate, or that were found to be fraudulent and stopped being paid out; as per ESD, of the $650 million stolen, between $350 million and $370 million have been recovered.

If you believe that your identity has been stolen and is being used to file illegitimate unemployment claims, report it here.

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Nigerian citizen arrested in unemployment fraud to be released on bail