Fictitious employer schemes target federal, state, and private unemployment and disability insurance programs, which provide benefits to workers who are out of work through no fault of their own or suffer non-work related injuries and are unable to work. In a fictitious employer scheme, co-schemers register fictitious businesses that do not do any business and have no real employees. After registering the fictitious businesses, co-schemers file claims as fictitious employees of the fictitious businesses who lost their jobs or are injured and collect a stream of unemployment and/or disability insurance benefit checks, which are sent by mail.
"Disability and unemployment insurance fraud is shameful conduct that wastes both taxpayer and insurance company dollars by siphoning away money from the people who actually need these benefits, such as the unemployed and the disabled, and diverting it to the greedy," said
"Today's indictment highlights the importance of this multi-agency investigation to identify fraud in benefit programs, such as the
"Unscrupulous life agents who allegedly commit crimes by creating ghost businesses and non-existent employees to game the system will be apprehended and prosecuted," said California Insurance Commissioner
This case is related to two other charged cases involving the same fictitious employer scheme, and is the ninth in a sweep of charged fictitious employer cases in the last year. On
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
Each count of mail fraud carries a statutory maximum sentence of 20 years in federal prison.
This case is the product of a joint investigation by the
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