Washington state gets NY bank to pay $10 million for role in pandemic unemployment fraud

Correction notice, Thursday, 1/2/25 at 8:25 a.m.: The original version of this story stated incorrectly that MovoCash used stolen identities to obtain unemployment funds. MovoCash was not accused of any wrongdoing by the Attorney General of Washington. This story has been corrected to note that it was criminals — not MovoCash — who used stolen identities to obtain the funds. This story has also been updated to include new comments from MovoCash CEO Eric Solis.

Metropolitan Commercial Bank will reimburse Washington state $10 million in unemployment funds that were stolen and processed through the bank during the pandemic, the state Attorney General’s office announced this week.

That brings the total amount of money that Washington has recovered from U.S. banks up to $52 million since 2020. The money has been recovered via a fraud recovery program.

Washington state lost $647 million from identity theft and unemployment benefits fraud during the pandemic. Since then, state agencies have recovered $432.6 million in stolen funds from various sources, according to the AG’s office.

“More than four years ago, criminals targeted our state unemployment fund, and my office has not stopped working to recover what they stole,” Attorney General and Governor-elect Bob Ferguson said in a press release.

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Those criminals used stolen identities to obtain unemployment funds and then moved them via MovoCash, a non-bank financial technology company or “fintech,” through the New York-based Metropolitan Commercial Bank. Ferguson said the bank accepted more than $15 million in stolen funds.

The AG’s office filed suit against Metropolitan claiming it did not do enough to prevent fraud, money laundering, and identification theft in connection with those fraudulent accounts. The bank accepted more than 3,700 fraudulent money transfers of Washington state unemployment benefits funds between April and July 2020, according to the AG’s office.

The state office initially recovered $732,000 from Metropolitan accounts using forfeiture laws to recover money frozen in accounts. Then the AG’s office sued Metropolitan for violating the state Consumer Protection Act.

MovoCash CEO Eric Solis told KUOW that he’d acted as a whistleblower, alerting Ferguson’s office and other agencies after discovering numerous suspicious transactions being pushed to MovoCash from Washington.

“MovoCash fully cooperated with subpoenas from Washington State, providing comprehensive account details, including names, balances, transaction activity, and other evidence to assist in recovering stolen funds,” Solis wrote to Ferguson’s office in an email shared with KUOW.

Solis further stated that MovoCash requires users to authenticate the credentials for their financial institution before using the platform, noting that the company was “never in control of withdrawing funds.”

For its part, Metropolitan agreed to pay $9 million to the Employment Security Department and $1 million to the Attorney General’s office to cover investigation costs and fund future consumer protection activities.

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“Washington has been a national leader on this effort. We were the first state to use forfeiture laws to recover stolen dollars that were frozen in accounts. Now we’re the first to resolve an investigation into a fintech company that the criminals used to move the money,” Ferguson said. “There is still more work ahead.”