Credit Union Catches Criminal

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Unemployment claim form on an office table.

Jerry Johnson, 54, of Webster City, Iowa, was sentenced to federal prison for using his credit union bank account to obtain unemployment insurance money he did not qualify for. (He had this great idea to scam as many states as possible since their unemployment agencies were overwhelmed with many people filing for unemployment during the COVID-19 pandemic across the nation. He probably figured the agency employees would be overworked and not paying attention to the details.)

In May 2020, $31,000 in unemployment funds from the State of Washington were deposited into Johnson’s credit union bank account. These funds were sent in the names of other people. (That was probably the first red flag.) Johnson withdrew the money and mailed the cash to his partners in the scheme. (Maybe their mail chain can continue on as pen pals in prison.)

The Commonwealth of Massachusetts tried to deposit more than $20,000 in fraudulent unemployment benefits into Johnson’s bank account. (Luckily, the credit union suspected something fishy and returned the money from the transaction.)

On January 28, 2021, Johnson pleaded guilty to one count of mail fraud. He was sentenced on July 1, 2021 to eight months in federal prison. He must also pay $31,062 in restitution to the State of Washington. After his release from prison, Johnson will have two years of supervised release.

While the COVID-19 pandemic offered another way for unscrupulous individuals to take advantage of government benefits, the Department of Justice (DOJ) was one step ahead. The COVID-19 Fraud Enforcement Task Force partners with agencies across government to enhance enforcement efforts against COVID-19 related fraud. This case is a good example of the DOJ’s commitment to holding hundreds of bad actors accountable for their illegal actions.

Today’s Fraud of the Day comes from a Department of Justice press release, “Iowa Man Sentenced to Federal Prison for his Role in COVID-19 Unemployment Insurance Fraud,” published on date.

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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.