Apparently, You’re Unemployed

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When you think of all the things that identity theft fraud can impact, credit card spending sprees, bogus tax return refunds, and illegally-acquired student and auto loans come to mind. One thing that doesn’t get mentioned a lot is the link between identity theft and unemployment fraud. In today’s unemployment fraud case, a Stockton, California man is one of five individuals involved in a scheme that used the stolen identities of more than 250 victims to file for more than $2.5 million in fraudulent unemployment benefits. (Apparently, the victims didn’t know they were unemployed.)

One of the five co-conspirators involved in the unemployment fraud scam worked as a tax compliance representative for the California Employment Development Department (EDD). She used her position to access personally identifiable information for workers throughout the state, then gave that information to other co-conspirators. Additional research revealed that the woman contacted the state agency and posed as a laid-off employee using a virtual private network that masked her Internet provider address and disguised her identity. (So sneaky.)

Today’s fraudster filed unemployment claims in the names of the victims and obtained debit cards issued to his victims. (Obviously, they had no idea their identities were being used in this manner.) He provided the names of fake businesses as the claimant’s last employer. (The fake name prevented the real employer from being immediately notified of the filed claim.) For more than a year-and-a-half, the Stockton man was involved with filing at least 269 false claims with his co-conspirators. (Altogether, the group of criminals collected nearly $900,000, which was certainly better than $2.5 million.)

The 25-year-old Stockton fraudster was convicted of unemployment fraud and was sentenced to four years and three months in federal prison for filing fake state unemployment insurance claims. One co-conspirator, a 29-year-old female, was sentenced to two-and-a-half years behind bars, while another has pleaded guilty and is awaiting sentencing. Charges against the other two are pending. (The defendants each face a maximum of 20 years in prison and a $250,000 fine for each count.)

Usually identity theft, as it relates to unemployment fraud, is not detected until an individual tries to file an unemployment claim and finds out that one already exists. Sometimes, victims receive an IRS statement of benefits collected from Unemployment Insurance or they are notified by their employer that a claim of benefits has been filed in their name even though they are currently employed. Unemployment identity theft, is not only inconvenient, but it could cause you to have your wages garnished or your tax refunds intercepted by the IRS. (That would be extremely unfortunate.)

If you suspect you have been victimized by unemployment fraud, watch out, it could be a bigger problem than you think. (Act fast to place fraud alerts on your credit reports and check over these documents with a fine-toothed comb for information that is not accurate.) Unlike the 269 individuals exploited by this unemployment fraud scam, you have more control over your credit than you think. Bottom line — be vigilant to prevent being victimized.

Today’s “Fraud of the Day” is based on an article entitled, “Stockton man sentenced in unemployment fraud; accused Turlock man still faces charges,” published by The Modesto Bee on September 21, 2018.

A 25-year-old Stockton man this week was sentenced to four years and three months in federal prison for filing false state unemployment insurance claims as part of a scheme, which authorities say involves a Turlock man accused of mail fraud.

Sergio Doriante Sanchez Reyna was part of a scheme from Dec. 12, 2014, through July 16, 2016, in which he and his conspirators filed at least 269 false claims seeking more than $2.5 million in fraudulent benefits, according to the U.S. Attorney’s Office in Sacramento.

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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.