California man gets nearly 5 years in prison for unemployment benefits fraud

San Diego Union-Tribune (CA)

A Vista man who fraudulently secured more than $300,000 in unemployment benefits was sentenced Monday to four years and nine months in federal prison, the U.S. Attorney's Office said.

Darris Cotton, 30, pleaded guilty in March to a fraud-related charge.

According to prosecutors, Cotton submitted at least 16 bogus applications to the state, with the names, dates of birth and social security numbers of others. He filed the applications in July and August 2020, a few months after the federal government passed a $2 trillion economic relief package to help businesses and workers affected by the COVID-19 pandemic.

Prosecutors said Cotton listed his mother's address on the applications, and that the state's Employment Development Department mailed debit cards to her home.

The mother told investigators she threw away the mail, according to court records. But Cotton apparently found the mail in the trash. Prosecutors said Cotton used the funds to buy money orders and lavish items, such as Gucci backpacks.

The amount on the debit cards totaled about $313,000, according to prosecutors.

"This defendant exploited an unemployment insurance program that was intended to be a safety net for workers who suffered financial hardship during a global pandemic," U.S. Attorney Randy Grossman said in a statement. "Crimes like this took money away from those who truly needed it."

Leila Morgan, Cotton's defense attorney, said Cotton believed he was taking money from the government but didn't realize until after his arrest that he could have left jobless people without unemployment benefits, according to court documents. Morgan added that Cotton did not come up with the idea for the scheme, but did accept responsibility for the crime.

Cotton has an extensive criminal and drug use history that began when he was a teenager, Morgan said.

Cotton came under investigation in late 2020 after two encounters with law enforcement officers. Both times staff at hotels — one in Carmel Valley, the other in Carlsbad — called police after Cotton checked in under suspicious circumstances, according to court records.

Cotton was on probation and, as a condition, had given up his Fourth Amendment right to be free from unreasonable searches and seizures.

In the first incident on Sept. 10, San Diego police officers went to Cotton's hotel room, where they found $30,000 in a backpack, as well as debit cards in the names of others and mail addressed to others.

The officers seized the debit cards and mail as possible evidence.

A month later, on Oct. 13, Carlsbad police officers responding to a call from hotel staff stopped Cotton in a BMW 330i. The officers found $97,000 in money orders that were blank and about $15,000 in cash.

Cotton agreed to forfeit the $112,000, as part of a plea agreement.

Cotton admitted he submitted fraudulent applications for unemployment benefits in other states, including Arizona, Pennsylvania and Maryland. He received about $10,000 from Maryland, according to court records. It was unclear if he received money from other states.

This story originally appeared in San Diego Union-Tribune.