Fraud from Within

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It is common for fraud to occur from within an organization. Employees with inside access to personally identifiable information often find a gold mine of data that helps them to carry out their fraudulent schemes. Such is the case for a former employee of the Rhode Island Department of Labor and Training (DLT). The man used his authority to steal more than half a million dollars from the state ‘s unemployment insurance coffers.

For more than five-and-a-half years, the former senior employment interviewer had access to the agency ‘s computer systems. (During that time, he used those systems to collect unemployment benefits for himself, as well as others through a variety of methods.) He used his authority to steal $508,691 from the Rhode Island DLT.

He carried out his ruse by changing beneficiaries’ mailing addresses so that he and others would receive the unemployment benefits instead. He also illegally authorized the extension of the benefits period for those involved in the fraudulent scheme; enabled fraudulent claims from individuals who were actually employed and ineligible to receive unemployment benefits to receive disbursements; and, removed blocks on benefits payments so that co-conspirators could continue to receive benefits to which they were not entitled.

Once evidence of the scheme was discovered, the former employee was immediately fired and the case was handed over to the Rhode Island State Police. (I wonder if he tried to file for unemployment benefits after the shocking discovery?)

The 37-year-old man was sentenced to almost two years in federal prison and three years of supervised release following his prison term for his involvement in the unemployment insurance fraud scheme. He is also required to pay $486,466 in restitution.

Congratulations to the Rhode Island DLT for detecting this instance of fraud from within. This criminal has been relocated from a position of power to a facility where he will have no authority at all for the foreseeable future.

Source: Today’s “Fraud of the Day” is based on an article entitled, “Former DLT worker sentenced in $500K unemployment insurance fraud scheme,” posted on turnto10.com on April 3, 2017.

A former Rhode Island Department of Labor and Training employee was sentenced in federal court for his involvement in an unemployment insurance fraud scheme.

Ambulai R. Sheku, 37, of Providence, a former senior employment interviewer at the DLT was sentenced on Monday in U.S. District Court in Providence on mail fraud, theft of government money and accessing a protected computer to commit fraud resulting in a $508,691 loss to the DLT.

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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.