State-Sponsored Chinese Hackers Stole More Than $20 Million in U.S. Covid Benefits: Report

Chinese state-sponsored hackers were responsible for the theft of at least $20 million in U.S. Covid relief benefits, according to a new report.

The hacking group APT41 allegedly stole Small Business Administration loans and unemployment insurance funds in more than a dozen states, the U.S. Secret Service reportedly told NBC News.

U.S. law enforcement officials and cybersecurity experts fear that $20 million in theft may be just the tip of the iceberg, according to the report, which says other federal investigations into pandemic fraud “seem to point back to foreign state-affiliated hackers.”

The Secret Service told the outlet there are more than 1,000 ongoing investigations into transnational and domestic criminal actors potentially defrauding public benefits programs.  APT41 is “a notable player,” the agency said.

APT41 is a “Chinese state-sponsored, cyber threat group that is highly adept at conducting espionage missions and financial crimes for personal gain,” Secret Service officials told NBC News. The group’s pandemic-related theft targeted 2,000 accounts associated with more than 40,000 financial transactions after gaining access to backdoor state government software. The group may still be inside the systems, experts warned.

Roy Dotson, national pandemic fraud recovery coordinator for the Secret Service, told NBC News “It would be crazy to think this group didn’t target all 50 states.” 

Though it is unclear whether the Chinese government instructed APT41 to steal the funds or if it just looked the other way, a senior Justice Department official told the outlet the scheme has serious national security implications.

“The United States is target No. 1, because we are competitor No. 1,” Ambassador Nathaniel Fick, the head of the State Department’s Bureau of Cyberspace and Digital Policy, told NBC News of China’s cyberespionage priorities. “It’s a really comprehensive, multi-decade, well-considered, well-resourced, well-planned, well-executed strategy.”

Meanwhile, there was an improper payment rate of roughly 20 percent for the $872.5 billion in federal pandemic unemployment funds, according to the Labor Department Office of Inspector General.

The Secret Service had recovered $286 million in stolen pandemic relief money as of August, including some funds stolen by APT41.

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