AI Candidate Fraud: Hiring Risks & Prevention

What employers should know about key developments this week:

Candidate Fraud Escalating Globally: According to the research firm Gartner, by 2028, one in four candidate profiles could be fraudulent in some way. Artificial intelligence (AI) tools now make it easier to create false identities and fabricate credentials, and employers face the dual risk of hiring unqualified candidates or unknowingly bringing in individuals with fraudulent intent.
North Korea’s Remote Worker Operation: From 2020 to 2022, the U.S. government identified over 300 U.S. companies—including Fortune 500 firms—that unknowingly hired fraudulent remote workers operating as part of a coordinated North Korean state operation.
Building an Insider Threat Program: Hiring fraudulent candidates can result in security threats, intellectual property theft, reputational damage, operational disruption, and potential Office of Foreign Assets Control sanctions. Employers should implement a comprehensive insider threat program that identifies risk areas while complying with applicable background check laws and other federal, state, and local legal requirements.

In this episode of Employment Law This Week®, Epstein Becker Green attorneys Brian G. Cesaratto and Genevieve M. Murphy-Bradacs examine how employers can safeguard their hiring processes against fraudulent candidates and state-sponsored threats in an AI-enabled environment.

How Employers Can Protect Against AI-Enabled Candidate Fraud
Play
September 23, 2026

Transcript

[00:00:03] George Whipple: Welcome to Employment Law This Week. I’m George Whipple. How do you know the job applicant you’ve hired is real? In this age of rapidly evolving AI tools, that has become a legitimate concern for employers. Epstein Becker Green’s Brian Cesaratto and Genevieve Murphy-Bradacs tell us what employers should watch out for and how to safeguard against fraudulent behavior.

[00:00:31] Brian Cesaratto: AI provides increased opportunity for and facilitates the use of false identities and resume fraud to gain employment. The risk is that an employer hires an individual who either does not have the correct credentials for the role and loses the ability to make a good hire, or the employer hires an individual with fraudulent intent and who presents upon hire an insider threat to your company.

[00:00:59] Genevieve Murphy-Bradacs: Over the last few years, the FBI has been issuing alerts warning employers that North Korea has been running a global operation in which skilled IT workers pose as remote job applicants to fund and advance state interests. From 2020 to 2022, the US government identified over 300 US companies, including Fortune 500 firms, that had unknowingly hired North Korea's fraudulent remote workers. The consequences of hiring fraudulent candidates include security threats, theft of intellectual property, reputational damage, operational disruptions, and even sanctions by OFAC.

[00:01:31] George Whipple: Candidate fraud and false identities are a problem across the world, and it’s escalating quickly: the research firm Gartner predicts that by 2028, one in four candidate profiles could be fraudulent in some way. So, what steps can employers take to avoid this?

[00:01:52] Brian Cesaratto: This type of risk is best addressed through a comprehensive insider threat program that identifies risk areas and addresses them consistent with legal requirements, including background check laws in the different states.

[00:02:09] Genevieve Murphy-Bradacs: Employers should also take steps to ensure that they are complying with the various federal, state and local laws that may be implicated during the hiring process, such as the federal Fair Credit Reporting Act, federal state and local EEO laws prohibiting unlawful discrimination and requiring reasonable accommodations, data privacy laws, biometric data laws, AI laws, and wiretapping laws, among others.

[00:02:30] George Whipple: Thanks, Brian and Genevieve. And thank you for watching. We’ll see you next time.

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