Road Show

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Unemployment insurance benefits are funded through taxes paid for by employers. (Unlike Social Security benefits, workers do not have to pay into the system through paycheck deductions.) The insurance program is intended to provide temporary income for workers who are either partially or fully unemployed and are in the process of looking for a new job, participating in training, or waiting to receive a “you’re hired” call. A Richton Park, Illinois man is charged with unemployment fraud for spearheading an illegal scheme in Connecticut and seven other states.

The U.S. Department of Labor states that to be eligible for unemployment benefits, two requirements must be met. A qualified beneficiary must be unemployed by no fault of their own (this means you can’t be fired) and the worker must meet state requirements for time worked or wages earned. (Clearly, the man at the center of today’s “Fraud of the Day” article does not appear to meet these requirements because he didn’t even have a legitimate job.)

The 31-year-old Illinois man allegedly filed fraudulent unemployment claims with the Connecticut Department of Labor for the purposes of receiving unemployment benefits he did not deserve. (He purportedly used the names, birthdates and Social Security numbers of multiple victims to carry out his ruse.)

 Supposedly, the man at the center of today’s case used the personal identifiable information of his victims to collect unemployment benefits through debit card accounts opened in the victims’ names. (The article states that the man used the illegally gained funds on himself.) He is also charged with taking his unemployment fraud road show to other states including Idaho, Iowa, Maine, New Jersey, New York, Pennsylvania and Texas, where he fraudulently obtained or tried to obtain unemployment.

Authorities tracked this guy down in Matteson, Illinois, where he was arrested and detained until extradited to Connecticut. He is charged with six counts of wire fraud and one count of aggravated identity theft related to the scheme that allegedly defrauded Connecticut’s unemployment insurance program.

Each of the six counts of wire fraud carries a maximum of 20 years in prison, while the charge for aggravated identity theft carries a mandatory consecutive term of two years behind bars. So that means he could be sentenced to a maximum of 122 years for managing a full-fledged fraud road show. (If convicted in other states, I suppose he could be facing a lot of time behind bars in eight states.)

Unemployment fraud is a crime that affects everyone including businesses, which have to pay higher taxes to cover the cost of fraud. Then there are the individuals who have a legitimate unemployment claim. It’s important to remember that although the Illinois man is facing charges related to unemployment fraud, he is innocent until proven guilty. (But, if proven guilty, it is highly unlikely he will ever be able to seek gainful employment. His unemployment benefits will include a lengthy stay in prison.)

Today’s “Fraud of the Day” is based on an article entitled, “Illinois man charged with unemployment fraud in Connecticut, other states,” posted on ctpost.com on February 3, 2018.

An Illinois man is facing charges after he was accused of operating an unemployment benefits fraud and identify theft scheme, the Department of Justice said.

Richard Lach, 31, of Richton Park, Illinois, was charged with six counts of wire fraud and one count of aggravated identity theft.

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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.