Second Time Around

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You would think that one jail term experience would be sufficient to encourage a fraudster to refrain from committing another crime. An article posted on NJ.com tells about the criminal acts of one man who managed to direct an unemployment insurance fraud scheme from behind bars, while serving time for a tax fraud scheme.

The story explains that the man was already in prison because he submitted false W-2 forms for himself and a family member, claiming to be employees of a trucking firm that he once owned, as well as other firms. (As a result of his illegal actions, he received more than $200,000 from the Internal Revenue Service.)

While in prison for the tax fraud conviction, the criminal and his three co-conspirators continued the scam by submitting seven fraudulent unemployment insurance claims – two were filed under false identities. (The claims were submitted under the names of two trucking businesses – one that had been previously owned by the prisoner and one that was now bankrupt.) The article states that the scam went on for more than six years and some of the illegally-gained money was wired to the prisoner’s prison commissary account during this time.

The scam was busted thanks to software that cross-checks unemployment applications with inmate and new-hire databases. (The fraudulent claims were flagged because the claimed employers were out of business.)

The 54-year-old former prisoner pleaded guilty and is facing seven years in state prison and must pay $54,623 in restitution to the Department of Labor. One co-conspirator is facing five years in prison and will pay $43,908 in restitution. Another could be sentenced up to three years in prison and will pay more than $25,000 in restitution, while the third fraudster will be sentenced to one day less than a year and pay $59,4000 in restitution.

Kudos to New Jersey for its use of new technology to prevent fraud. Here’s hoping other agencies begin to implement new anti-fraud measures that help to track down and stop criminals like the ones in this case. (Thanks to updated security tools and measures, the repeat prisoner won’t get a third chance at scamming the government.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”N.J. Unemployment Scam Leads to Guilty Plea in $183K Fraud,” written by Ted Sherman and posted on NJ.com on February 23, 2015.

TRENTON – Stephen Pirrone, who was released from federal prison in May in connection with a $200,000 tax fraud, is facing another term behind bars in New Jersey, after pleading guilty today in a scheme to steal more than $180,000 in fraudulent unemployment benefits.

The 54-year-old Paramus man admitted conspiring with two others to collect benefits based on fake employer wage statements submitted in the names of two trucking businesses that were tied to him.

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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.