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Federal law enforcement announces charges against 10 people for $1.2 million in unemployment fraud

Michelle Rindels
Michelle Rindels
Criminal JusticeEconomyIndyBlog
Nicholas A. Trutanich, United States Attorney for the District of Nevada and Ray Johnson, Assistant Special Agent in Charge for the Federal Bureau of Investigation

Federal officials announced six criminal complaints against people accused of defrauding unemployment systems in Nevada, Arizona and California of some $1.2 million, including a Las Vegas postal worker who allegedly facilitated a scheme.

Nevada U.S. Attorney Nick Trutanich and representatives of other federal agencies including the FBI and the Secret Service held a press conference in Las Vegas on Thursday to announce 14 felony charges against 10 different people.

“The U.S. attorney's office and law enforcement is turning the heat up on unemployment fraudsters,” Trutanich said. “Today's announcement should send a strong message to those would-be fraudsters: Stop trying to exploit the system, and your greed is harming Nevadans."

One complaint charged a postal carrier for conspiring with a Las Vegas man who was charged earlier this year when some two dozen unemployment debit cards in other people’s names were found at his home. The postal worker allegedly tipped off the man through WhatsApp messages about postal boxes that were seldom checked and would be good places to direct correspondence from unemployment claims filed fraudulently and worth some $460,000.

“The American public trusts that Postal Service employees will obey the law and honor the commitment to their duties,” said John Masters of the U.S. Postal Service Office of Inspector General (OIG). “When that duty and trust is violated, as it was in this case, the Postal Service OIG investigates those matters.”

A second complaint involved three defendants apprehended in August in a rented Maserati who were found with California unemployment debit cards approved for a quarter million dollars in benefits, as well as $45,000 in cash. The defendants were allegedly gambling in Nevada casinos.

A third complaint stemmed from a September traffic stop Las Vegas police made on a Mercedes Benz. Two Florida men were found with at least 17 California unemployment debit cards in the names of other people that were approved for some $385,000 in benefits.

Fraud has been a major cause cited by officials with the Nevada Department of Employment, Training and Rehabilitation (DETR) for monthslong delays in paying certain claimants, particularly within the Pandemic Unemployment Assistance (PUA) program for gig workers and the self-employed. DETR announced on Thursday that it was denying more than 217,000 of the nearly half a million initial PUA claims filed so far, saying the agency has been unable to verify identities for a large number of applications. 

Critics, however, have said the fraud has become an excuse for processing the claims so slowly.

Trutanich concluded the press conference without taking questions "because these investigations are ongoing and there's more to come." 

The $1.2 million allegedly diverted because of the fraud announced Thursday is small compared with the volume of money DETR has paid out this year. Across all programs, the state has disbursed about $7 billion this calendar year in state and federal benefits.


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