Maryland Gov. Larry Hogan said the state has uncovered more than 47,500 fraudulent unemployment insurance claims filed as part of “a massive, sophisticated criminal scheme” involving widespread identity theft.

Hogan made the revelation Wednesday during a press conference stating the claims, amounting to more than $501 million, were discovered over the July 4th weekend attempting to use stolen identities and information of people acquired from previous national data breaches.

Not only did they catch the scheme before the money was distributed but they aided federal authorities to uncover similar criminal activity, he said.

“The state of Maryland exposing this illegal scheme and notifying the federal authorities has helped shed light on related fraudulent criminal activities in at least a dozen other states,” Hogan said.

Tiffany Robinson, Maryland’s labor secretary, said the scheme was uncovered when their division of unemployment insurance detected an unusual increase in out-of-state claims, stating “fraudsters” were attempting to capitalize on the coronavirus pandemic.

The scheme, she said, attempted to take advantage of the system that allowed for individuals to apply for unemployment benefits amid the pandemic by claiming one had lost their job absent of the former company proving the claim.

The discovery resulted in a freeze to all out-of-state claims, including legitimate applications but those represent a small number and they will be resolved as soon as possible, Hogan said.

Special Agent Derek Pickle of the U.S. Department of Labor Office of Inspector General said they have seen “a dramatic increase” in unemployment fraud amid the pandemic and it was affecting all 50 states, ballooning such investigations at their office from 10 percent of their workload to more than half.

“And that number continues to grow by the day,” Pickle said.

The revelation follows the Federal Bureau of Investigation having announced July 6 that the agency was seeing a spike in such fraudulent claims.

Concerning the identities stolen in the scheme, Hogan said they don’t know where the breach occurred or who perpetrated it.

“It could be international. It could be organized crime in America, we just don’t know the answer to it. But it’s not just a random individual,” he said, adding the breach was not of Maryland’s systems.

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