Go to Prison, Get…Paid?

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36419152 - judge looking the condemned prisoner in the court room

It takes some real nerve to fraudulently use the state as a source of income while it has you imprisoned. But that’s exactly what a Massachusetts inmate was caught doing, according to a press release published by the Attorney General’s office.

The man first began receiving unemployment benefits following a separation with his employer. He later was incarcerated for an unrelated crime, but continued to collect the benefits through his wife, whom he reportedly asked to file a new unemployment claim on his behalf and to share some of that money with him, so he would have spending money for the prison canteen. (Wonder how many Dr. Peppers and bags of Fritos this guy was consuming on the daily?) She complied, and deposited other portions of the checks into her personal bank account.

An investigation by the Massachusetts Department of Unemployment Assistance discovered the couple’s conspiracy to defraud the state, and it shared with the Attorney General evidence of more than $58,000 worth of benefits payments that the couple had illegally collected. (That amount is higher than the median household income in the U.S.) Now the husband is back in prison, serving an 18 month sentence after he pleaded guilty to 98 counts of Unemployment Fraud, to Larceny Over $250 by Single Scheme, Conspiracy to Commit Unemployment Fraud and Conspiracy to Commit Grand Larceny. Following his release, he will be on probation for three years, during which he will need to secure a legitimate source of income to repay the state $29,015. His wife was sentenced to five years of probation, and also must repay the state, after she pleaded guilty to related charges.

Unemployment benefits are meant to protect out-of-work individuals from falling into a cycle of poverty while they pound the pavement looking for employment. While an inmate, obviously, is unable to job-hunt from a jail cell, having to serve a prison sentence for criminal acts is an entirely avoidable unemployment situation and one that an individual enters into on their own volition.

Source: Today’s ”Fraud of the Day” is based on, ”Former Inmate Pleads Guilty, Sentenced to Jail in Scheme to Steal Unemployment Benefits While Incarcerated,” a press release published by the Massachusetts Attorney General’s office on April 1, 2016.

Kevin Smith, age 45, of Mattapan, pleaded guilty to several charges of fraud, larceny and conspiracy and he was sentenced to 18 months in prison followed by three years of probation. Smith was also ordered to pay restitution of $29,015 to the Commonwealth.

According to authorities, Smith applied for and began receiving unemployment benefits in January 2009 after being separated from his employer. In August 2009, Smith was incarcerated on unrelated charges, but he maintained contact with his former wife, Nancy. During several recorded phone calls, Smith encouraged Nancy to continue collecting his benefits, to file a new unemployment claim in his name, and to send him money for use in his prison canteen.

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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.