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All You Need Is a Wig

Unemployment-Unemployment Insurance-7
Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

On Dec. 8, 2021, Eric Jaklitsch was arrested at his home in New Jersey and was transported to the west coast, to be charged in Federal Court for a scheme to defraud the California Employment Development Department (EDD). To execute this scheme, Jaklitsch collected personally identifiableĀ information (of numerous individuals (including names, birth dates, and Social Security numbers) and a wig.

In executing his alleged fraudulent scheme, prosecutors say that Jaklitsch submitted false photo ID’s to a private company that government agencies used to verify the identities of millions of Americans through facial recognition. This false information included images of fake driver’s licenses that contained photos of Jaklitsch and the names of the purported fraudulent claimants. The key to his verification?Ā  A large, curly, orange wig, worn by Jaklitsch as a cover to his own image in the photos.

Once the wig images were verified, Jaklitsch filed the fraudulent unemployment insurance claims with EDD under the same identities. All were reported as jobs lost due to the coronavirus including jobs such as ā€œAqua Fitness Instructor,ā€ ā€œChildren’s Zoo Caretakerā€ and ā€œChauffeur, Funeral Car.ā€

Jaklitsch allegedly filed 78 fraudulent claims unemployment insurance claims for $2.5 million in total. In the fraudulent unemployment insurance applications, Jaklitsch requested that the benefits be mailed to various addresses under his control, including his residence in New Jersey. EDD approved dozens of the fraudulent claims and mailed about $900,000 in EFT cards to Jalitsch.

The facial recognition software never flagged the image as false.Ā  An internal investigation eventually identified Jaklitsch as a person conducting a fraud scheme and referred the case to federal law enforcement.

Shout out to the internal investigators who got the job done.

Today’s Fraud of the Day is based on an article, ā€œWig-Wearing Jersey Guy Scammed Facial-Recognitionā€ published by The Daily beast on February 11, 2022

IĀ D.meā€”which gathers hordes of data from millions of Americans, including through facial recognition and phone recordsā€”managed to get duped by a guy in New Jersey. Federal prosecutors said a New Jersey man used a large, curly orange wig to verify fake driver’s licenses from multiple states, allowing him to obtain $900,000 in federal unemployment funds from California. The revelation is a slap in the face of the companyā€”which was contracted by 10 federal agencies and whose facial-recognition software was dropped by theĀ IRSĀ this week. It would not comment toĀ The Washington PostĀ on how the suspect was able to exploit its software to claim the funds, but said ā€œthe tactics of fraudsters are constantly evolvingā€ and it ā€œuses extensive analytics and models to prevent identity theft.ā€ The company valued itself last year at $1.5 billion, while the suspectā€”Eric Jaklitschā€”is in custody in California on wire-fraud charges.

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