NORFOLK, Va. — COVID-19 unemployment fraud was rampant across the U.S., and cases continue to be worked out in the courthouse in Hampton Roads.
Some of the most shocking cases involved people using personal information from prison inmates to receive unemployment benefits, which was money they were not entitled to.
One recent case involved four local people.
Inmate Dedrion Short was locked up at Buckingham Correctional Center in Dillwyn, Va. in June of 2020 when the scheme first unfolded.
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While the federal government was pumping out COVID relief money, Short had Meisha Thompson, of Virginia Beach, who was not in prison, use his information to get unemployment benefits, according to federal court documents.
The Virginia Employment Commission (VEC) gave him over $16,000.
While in jail, Short gathered then information from other inmates, like their social security numbers and birth dates.
Thompson, along with two others, Lemyron Hawkins, or Chesapeake, and Norman DeLoatch, of Norfolk — who are Short's half brothers, court documents say — then filed unemployment claims successfully for 21 different inmates between June 2020 and November of 2020.
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The VEC sent them over $327,000 in total, according to court records.
The Department of Justice has investigated thousands of fraud cases connected to the COVID-19 pandemic.
The Associated Press did an analysis and found that criminals took more than $280 billion in COVID-19 funding, with another $123 billion wasted or misspent.
Experts said money went out too quickly and there were not enough checks and balances in place.
In the Buckingham inmates' case, the four each pleaded guilty to conspiracy to commit mail fraud.
Records show that once the VEC realized what was going on, they were able to claw back some of the funds. But they still lost over $309,000.
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Legal Analyst Sonny Stallings from the Stallings Law Group says this amount of fraud is concerning.
“I know we want a crisis and we wanted to get people money so they could live but … the people that run these programs should know, everybody in the world knows, there's scammers out there and you make it too easy for a scammer to get government money," said Stallings. "There should have been some checks and balances built in before they started handing this money out. I don't care how desperate we were.”
The four suspects in this case are all expected to be sentenced this December at the Norfolk Federal Courthouse.
The Virginia Employment Commission released the following statement in response to a News 3 inquiry:
The Virginia Employment Commission (VEC) understands the importance of transparency and accountability, particularly when it comes to safeguarding public funds. During the pandemic the VEC paid out over $14 billion in benefits. Even though the overwhelming majority of the funds went to legitimate unemployed Virginia workers in need there is still a large number of cases under collection and investigation. Since April of 2020, VEC has reported $85.9 million in fraud to the U.S. Department of Labor.
Like all state unemployment insurance agencies, the VEC faced unprecedented identity theft fraud during the pandemic, much of it perpetrated by sophisticated criminal organizations, including those based overseas. Despite these challenges, we have been able to identify some perpetrators and are actively working with our state and federal partners such as the Virginia Office of the Attorney General and the U.S. Department of Labor Office of the Inspector General to bring them to justice.
With regards to your question about the total amount given out to inmates in Virginia, the VEC does not track overpayments in that manner. However, you may have seen the VEC has worked with federal prosecutors in several cases [justice.gov] to hold those fraudsters accountable.
In response to the high volume of claims and the economic impact posed by the pandemic, we've implemented and continue to apply robust technology, process improvements, and strengthened internal controls to protect public funds. While we can’t go into detail for security reasons, we are using sophisticated techniques to detect and stop fraud much earlier in the process. This includes the expanded use of ID.me [vec.virginia.gov], a digital identity verification tool that adds an additional layer of security, making it easier for legitimate claimants to access benefits while blocking fraudsters from accessing our system. Additionally, we have upgraded our call center technology to better detect and prevent fraudulent activity in real-time.
Employers can play a critical role in helping the VEC prevent fraud by responding timely and accurately to separation reports. Separation information is crucial for determining if claimants are eligible for benefits. Benefits are paid through state and federal unemployment taxes collected from employers and their responses help to ensure that only eligible individuals receive benefits thus preventing fraud. Employers can learn more about their responsibilities in the separation process on our website.
If a customer suspects fraud or identity theft related to unemployment insurance benefits, they are urged to report it by completing the VEC’s Fraud/Theft/Overpayment form [vec.virginia.gov] on the our website.
VEC is dedicated to maintaining the integrity of the unemployment insurance system and will continue to take every necessary step to prevent fraud. Our team takes this issue very seriously and will continue to pursue those who attempt to defraud our system, ensuring resources are safeguarded for Virginians who are in temporary need of this critical support.
