It's a crime so brazen that even police have been victims of the scheme.
And it's so pervasive that prosecutors were surprised by the "tsunami of fraud that we have seen around the country," according to Wifredo Ferrer, the U.S. attorney for the Southern District of Florida.
Unemployment benefits are issued as part of a federal and state partnership to provide money to people out of work. State payments are issued on debit cards or to a bank account.
But criminals are capitalizing on that system by buying personal information stolen from places such as hospitals, medical offices, schools and retirement programs. They then log onto state websites and file for unemployment benefits. Since the priority is for states to get the money out quickly, they don't wait for an employer to verify the identity of the person applying for the benefits. Victims typically don't find out what's happened until their employer is notified that they are receiving unemployment payments.
Federal investigators estimate the unemployment benefits fraud totals about $5.6 billion, which includes schemes where identities are stolen.
"The fact that this is so easy to commit is something that has been a real challenge to law enforcement because the fraudsters keep evolving, and they always find a new way to steal our identities," Ferrer told CNN. "And all you need sometimes is a name, a date of birth and a Social Security number. And sometimes, you don't even need that to commit this crime."
Just ask Cora Mann, who was startled to learn that someone had filed for about $3,000 in unemployment benefits under her name. There was one problem -- she's a detective for the North Miami Beach, Florida, Police Department.
"It makes me very angry because I work too hard for whatever I have and what I earn for myself and my family," Mann said. "It just makes me angry that you could sit behind your computer and hide like a coward and just take my stuff without me having anything to do with it."
Mann took her case to one of her colleagues, Detective Craig Catlin, who happens to be one of the country's leading experts on fraud.
"Fraud's better than drugs on the street," Catlin said.
Catlin said he first noticed that criminals were stealing unemployment benefits because states generally do not confirm the identity of the person filing a claim until after the money is sent.
"It's so new and overwhelming that now (states) are doing a catch-up process to get checks and balances so they'll be less fraudulent funds," he said. "We have cases that range from just a few high school kids doing $20,000, $30,000 in a few months to cases where we know we're in the two, three, four million dollar range for just one group of guys in South Florida."
Mann's case led to a search warrant at a home in Miami Gardens, where police found more than 1,000 suspected stolen identities. Three brothers, including a juvenile, were arrested. The two adult brothers have pleaded no contest to identity theft charges and will be sentenced in July.
"You feel so vulnerable," Mann said. "You feel like somebody just assaulted you, physically assaulted you, when they do things like that."
No one knows the extent of the fraud from identity theft alone. In a 15-month period, the state of Florida stopped 97,000 fraudulent claims worth about $400 million, according to Jesse Panuccio, executive director of the Florida Department of Economic Opportunity, which oversees unemployment benefits. Those cases were turned over to the U.S. Department of Labor's inspector general's office.
He acknowledged the state could not specify the amount of fraud that went through to identity thieves.
"We're constantly adjusting the system to see what is efficient, and what is not and what protects against fraud," he said. "But in the end, we can't go back to 1982, where everything's pen and paper again. We have to have a system that uses modern technology and is efficient for the good guys, for the people who actually need money from the system."
He said Florida, like other states, is under a federal mandate to pay claims "within a couple of weeks, even if an employer hasn't responded" to confirm the person is unemployed.
The fraud is so serious that Panuccio wrote a letter in March to U.S. Labor Secretary Tom Perez, warning that "organized criminal enterprises are attacking public-benefit systems on a daily basis. Unfortunately, South Florida has become a national hub for this activity."
While Florida uses a state-of-the-art system to detect fraud, Panuccio wrote that "few states have implemented back-end analytics to actively combat fraud. We suspect that if such a program were deployed nationally, the amount of (unemployment insurance) fraud detected would be staggering."
The Department of Labor agreed to have Perez sit down with CNN for an interview on the issue, but it was abruptly canceled by Carl Fillichio, senior adviser in the public affairs office, and no reason was given.
Instead, the department issued a statement.
"It is important to note, though, that -- at 3.19% -- the estimated rate of fraudulent payments remains extremely low," it said.
The department said it has taken numerous steps in the last four years to combat the fraud. That includes spending $625 million to assist states in modernizing their computer systems and creating an "unemployment fraud integrity center of excellence" to explore new technologies.
"There is no place for fraud and abuse in the (unemployment insurance) program," the statement said. "The department will remain vigilant and will continue to work with our state partners to prevent, detect and recover improper payments -- and prosecute individuals suspected of fraud."
The Labor Department's inspector general concluded in a 2014 report that the unemployment insurance program is "particularly at risk for improper payments and the department's ability to identify and reduce UI improper payments continues to be a challenge."
The inspector general has recommended more vigilant oversight of the unemployment insurance program "by increasing the frequency of on-site reviews" at state agencies and to continue pursuing legislation that would allow states to use part of recovered fraudulent payments to detect and deter fraud.