As much as 50% of the stimulus unemployment money may have been stolen, Axios reports

• The CEO of a fraud detection service told Axios that 50% of stimulus unemployment may have been stolen.
• This follows a report that found $39 billion in unemployment money was wasted, partly due to fraud.
• Stimulus checks were also stolen during the pandemic, prompting a need for better oversight.
• See more stories on Insider's business page.

From direct stimulus payments to unemployment benefits, Americans have received a range of different forms of financial aid during the pandemic. But a large chunk of that aid – as much as 50% – may not have made it into the hands of the right people.

Axios reported on Thursday that unemployment fraud has been on the rise during the pandemic, with Blake Hall, the CEO of ID.me, a fraud prevention service, telling the news service that America has lost $400 billion to fraudulent claims and that as much as 50% of unemployment claims might have been stolen. The CEO of LexisNexis Risk Solutions' Government business, Haywood Talcove, also told Axios that at least 70% of stolen money ultimately left the country, with much of it ending up in places including Chin and Nigeria.

"These groups are definitely backed by the state," Talcove said.

This is not the first reported instance of stimulus money ending up in the wrong hands. Last week, federal authorities announced that Venezuelans living in South Florida and Mexico had stolen over $800,000 in stimulus checks since the start of the pandemic.

And on May 28, the Office of the Inspector General (OIG) found that $39 billion in unemployment money from the CARES Act had been wasted, partly due to failures in detecting fraud and improper payments.

So how are scammers managing to carry out this fraud?

Axios reported that they often steal people's personal information to withdraw money, and "mules," or low-level criminals, are given debit cards to withdraw that money from ATMs, which then gets transferred abroad.

Given that some Democrats are pushing for recurring stimulus payments and unemployment benefits beyond what has already been delivered, fraud is something that will need to be addressed before moving forward. The OIG recommended more modernized technology to better detect fraudulent payments, along with working with states to help process claims.

But as a growing number of GOP-led states are ending unemployment benefits early to encourage people to get back to work, any further extension of unemployment benefits looks unlikely. President Joe Biden even said in a speech last week that while the benefits have been effective thus far, "it makes sense" for them to expire in September.

"A temporary boost in unemployment benefits that we enacted helped people who lost their jobs through no fault of their own, and who still may be in the process of getting vaccinated," the president said in brief remarks following the May jobs report. "But it's going to expire in 90 days - it makes sense it expires in 90 days."