Calif. U.S. Attorney: Romanian National Pleads Guilty to $5 Million COVID Relief Fraud

SAN DIEGO, California, July 12 -- The U.S. Attorney for the Southern District of California, Randy Grossman, issued the following news release on July 11, 2023:

Constantin Sandu of Romania pleaded guilty in federal court today, admitting that he masterminded a scheme to steal more than $5 million in California unemployment insurance benefits intended to help workers impacted by the pandemic.

According to his plea agreement, Sandu conspired with an uncharged co-conspirator identified as "D.C." plus 213 unnamed Romanian co-conspirators across California and in Romania to fraudulently obtain millions of dollars in California unemployment insurance benefits by fabricating documents, creating fictitious accounts and businesses, and filing bogus claims with California's Economic Development Department, which administers the state's unemployment benefits. Sandu wired $16,000 of proceeds from the fraud to Romania to renovate his house.

In a forfeiture addendum, Sandu agreed to forfeit $214,950 of proceeds that he personally received from the offenses.

"This defendant has admitted to presiding over a vast network of people who exploited a program that was meant to help Californians during the pandemic," said U.S. Attorney Randy Grossman. "The scheme alleged in this case diverted millions of dollars from those who truly needed it. We will continue to zealously prosecute perpetrators of COVID relief fraud." Grossman thanked the prosecution team and the investigating agencies for their excellent work on this case.

"I am extremely proud that San Diego's law enforcement partners were able to successfully apprehend Sandu," said FBI San Diego Field Office Special Agent in Charge, Stacey Moy. "Unfortunately, this was an elaborate scheme that involved many alleged fraudsters. We will continue to tirelessly work to bring all those involved to justice."

"Millions of dollars of unemployment benefits and pandemic-related aid were fraudulently obtained by individuals who falsified information and redirected the funds for their own personal gain," said Tyler Hatcher, Special Agent in Charge of IRS Criminal Investigation Los Angeles Field Office. "Constantin Sandu is now being held accountable for this $5 million scheme. IRS-CI will not tolerate criminal networks that prey on vulnerable communities and exploit resources meant for those in need. IRS-CI is committed to working with our law enforcement partners locally and internationally to locate and hold criminal organizations accountable for their crimes."

The plea agreement said that beginning in July 2020 and continuing until late summer of 2022, Sandu and hundreds of unnamed co-conspirators, including the one identified as D.C., learned and developed a process to receive the most benefits possible by using fraudulent identifications, falsified utility bills, falsified earnings statements, falsified W2s, fraudulent health insurance cards and non-existent companies. Additionally, Sandu learned to "backdate" or modify the EDD applications with an earlier unemployment start date to generate even bigger pay days.

Co-conspirators across California would share information, knowledge and resources with Sandu, for Sandu to file claims for regular unemployment insurance and expanded pandemic unemployment insurance benefits from California EDD. Co-conspirators communicated with Sandu via Facebook or other electronic means or met with him in person to provide their Personal Identifying Information, known as PII.

According to the California Franchise Tax Board, none of the companies named in the various W2s submitted for conspirators' EDD applications was real. According to Blue Cross Blue Shield, none of the member identification numbers submitted for conspirators' EDD applications was real.

In total, Sandu conspired with D.C. and unnamed co-conspirators to fraudulently obtain no less than $5,207,687 in California unemployment insurance benefits.

Sandu is scheduled to be sentenced on October 16, 2023, at 10 a.m. before U.S. District Judge Larry Burns.

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DEFENDANT...Case Number: 23-cr-00386-LAB

Constantin Sandu, aka Bobi Sandu, aka Ionut Mihai...Age: 33 Transient, Romanian

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SUMMARY OF CHARGES

Title 18, U.S.C. Sec. 1349 and 1343 - Conspiracy to Commit Wire Fraud

Maximum penalty: Thirty years in prison, a fine of $1 million or both;

Title 18 U.S.C. Sec. 1956(a)(2)(A) -- Laundering Monetary Instruments

Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the monetary instrument or funds involved in the transportation, transmission, or transfer, whichever is greater;

Title 18 U.S.C. Sec.Sec. 981(a)(1)(C) and 982(a)(1), and Title 28, U.S.C. Sec. 2461(c) - Criminal Forfeitures

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INVESTIGATING AGENCIES

Federal Bureau of Investigation

San Diego Police Department Economic Crimes Unit

Internal Revenue Service

California Employment Development Department Investigative Division

Homeland Security Investigations

Department of Labor Office of Investigator General

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Original text here: https://www.justice.gov/usao-sdca/pr/romanian-national-pleads-guilty-5-million-covid-relief-fraud