Fake Entrepreneur

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There are many challenges that go along with becoming an entrepreneur. A solid business plan and a product or solution in high demand is central to a company ‘s success. Then there ‘s the financing part and the need for an intelligent and efficient workforce. A woman created multiple fake companies to carry out a complex unemployment insurance scheme that allowed her to fraudulently collect unemployment insurance benefits in excess of $150,000.

The woman at the center of today ‘s “Fraud of the Day” created and operated the fake companies out of her North Carolina home. She reported to the Virginia Employment Commission (VEC) that she employed workers who earned wages. (She used the stolen identities of real people to fabricate her workforce.)

Over the period of one year, she filed unemployment claims using 28 different identities stating that they had all been laid off from their positions at the fake companies. As a result of her deceptive claims, she received unemployment benefits worth more than $150,000 from the VEC. (The unemployment benefits were deposited directly into her bank account or onto debit cards she controlled.)

The 47-year-old woman pleaded guilty to mail fraud and aggravated identity theft. She was sentenced to 57 months in prison and ordered to pay $152,449 in restitution to the VEC. (It turns out that the fraudster carried out similar schemes in Indiana and Pennsylvania as well.)

Unemployment benefits are designed to help people who are laid off from legitimate jobs, not to benefit fake owners of fabricated companies. This lazy criminal tried to cut corners by setting up non-existent businesses to steal benefits that were reserved for qualified individuals. As this case demonstrates, the government punishes those who try to circumvent the policies and programs intended to protect hardworking citizens who lose their position due to legitimate reasons.

Source: Today’s “Fraud of the Day” is based on an article entitled, “Danville woman gets 57 months for VEC fraud,” published by Star-Tribune on January 27, 2017.

NORFOLK ,Paula Lane (a.k.a. Paula Hipps), 47, formerly of Corapeake, N.C., now residing in Danville, was sentenced Jan. 17 to 57 months in prison for her role in an insurance fraud scheme that caused a loss over $150,000 to the Virginia Employment Commission (VEC) and similar agencies in Indiana and Pennsylvania.

Lane pleaded guilty to mail fraud and aggravated identity theft on Sept. 15, 2016. According to court documents, Lane devised and executed a complex unemployment insurance fraud scheme that resulted in payments of more than $150,000 in one year. Lane, at the time operating out of her home in Corapeake, created fake companies and reported to the VEC that the companies had employees who earned wages. The employees were real people whose identities Lane stole for the purpose of this scheme. Between August 2013 and August 2014, Lane filed unemployment claims under the names of 28 different identities stating that they had been laid off. Lane was then able to receive unemployment insurance money that was deposited directly into her bank account or onto debit cards that she controlled. Lane also filed false claims in Indiana and Pennsylvania.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.