A Michigan business owner has been charged with orchestrating a large-scale unemployment insurance (UI) fraud scheme that siphoned off more than $1.3 million in federal and state benefits. According to the Michigan Department of Attorney General and the U.S. Department of Labor Office of Inspector General (DOL-OIG), the defendant filed dozens of fraudulent UI claims using synthetic identities and former employees who were no longer living in the state.
Investigators allege the business owner used personal data purchased on the dark web to build fake employment histories for fictitious workers. He then submitted claims for layoffs that never occurred and routed all benefits to prepaid debit cards under his control. Surveillance footage later confirmed repeated ATM withdrawals from the same small cluster of machines in Wayne County—despite records showing the claimants lived hundreds of miles apart.
The scheme unraveled when cross-state wage reporting flagged multiple claimants as having “worked” at different Michigan businesses simultaneously—often with overlapping employment dates and identical wage entries. Data analysts also identified a pattern of identical IP addresses used to certify weekly claims.
“This wasn’t an administrative mistake—it was a calculated, systematic drain on public resources,” said Michigan Attorney General Dana Nessel. “This case reinforces why modern identity analytics and employer verification tools are essential to safeguarding unemployment programs.”
The defendant faces charges of unemployment insurance fraud, identity theft, wire fraud, and aggravated misuse of government funds.
Today’s Fraud of the Day is based on reporting from the Michigan Attorney General’s Office and the Detroit Free Press regarding UI fraud in 2025.
