Organizing Unemployment

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The fear of unemployment looms over many in our country. With the tough economy as a constant reminder that unemployment could be a possibility for any of us, it is important that those who are eligible for unemployment insurance are able to receive it. Today’s Fraud of the Day from The Baltimore Sun shows us how some individuals seeking unemployment compensation, may not necessarily be in the position to receive benefits.

The article reported that three fraudsters orchestrated an unemployment scam in the Baltimore area – and one member of the trio was behind bars. (Shocking!? The group worked together to claim at least $409,000 in unemployment benefits from the state of Maryland. The ring leader, also the inmate, created companies while one of his cohorts found identities of Maryland residents to appear employed by the fake company; the third fraudster filed for unemployment by using the stolen identities, as if they were previously employed by the fictitious company. (Talk about team work!)

Prosecutors commented on the case saying? ”The scheme usually used the personal identifiers of actual Maryland residents without their permission, including their names and dates of birth.”(Well, who would give permission to be used as a game piece in fraud?) The Department of Labor, Licensing, and Regulation (DLLR) issued prepaid debit cards with benefits that the trio used to obtain $88,500 in purchases and cash. Investigators said that the man behind bars was able to lead the scheme through personal phone calls and visitation. The judge sentenced the man to five additional years in prison, on top of his unrelated prison sentence. In addition, the individuals will have to pay $88,500 each in restitution.

Whether you are behind bars or in the public, operating a fraud scheme is possible with the right connections. But, if we are discussing connections, the biggest connection you’ll have by operating a fraud scheme is the future connection with prison.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Baltimore Man Sentenced to Five Years for Unemployment Fraud,” and written by Kevin Rector and published by The Baltimore Sun, December 11, 2012.

A 48-year-old Baltimore man was sentenced to five years in prison for fraudulently claiming hundreds of thousands of dollars in unemployment benefits from the state using false identities, a scheme he conducted in part while already behind bars on unrelated charges, according to the Maryland U.S. attorney’s office.

Kevin Bernard Smith, who pleaded guilty to conspiracy to commit access device fraud and aggravated identity theft, will also have to serve three years of supervised release, prosecutors said.

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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.