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Building Bridges to Success: Attacking Unemployment Insurance Fraud

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Presentation on theme: "Building Bridges to Success: Attacking Unemployment Insurance Fraud"— Presentation transcript:

1 Building Bridges to Success: Attacking Unemployment Insurance Fraud
Tony Dixon, Director Division of Program Fraud U.S. Department of Labor Office of the Inspector General Washington, DC

2 DOL - OIG Mission To serve the American Worker and Taxpayer by conducting audits, investigations, and evaluations resulting in improvements in the effectiveness, efficiency, and economy of Departmental programs and operations; detect and prevent fraud, waste and abuse in DOL programs (and labor racketeering in the American workplace, the only OIG to do so); provide advice to the Secretary and Congress on how to attain the ultimate in program performance.

3 DOL-OIG Offices Approx. 150 Agents 28 Offices New York CHICAGO RO
Detroit Seattle Cleveland Buffalo Boston Meriden New York Pittsburgh Newark CHICAGO RO Atlantic City San Francisco Columbus PHILADEPHIA RO Kansas City Denver RA Roanoke Las Vegas WASHINGTON DC RO St. Louis LOS ANGELES R.O Jackson RA ATLANTA RO DALLAS RO Baton Rouge RA Jacksonville Approx. 150 Agents 28 Offices Houston RA Miami Sunrise

4 Why A Joint Effort? What is UI? Who does UI Fraud Affect?
– Benefits afforded via a multi-billion dollar program dependent on employer and complainant compliance with Federal and State laws. Who does UI Fraud Affect? Minimally, every American citizen. Who is responsible for addressing UI fraud? Arguably, every responsible American adult that has knowledge of fraud.

5 The American Recovery and Reinvestment Act
Why so important? Provides assistance to a significant amount of unemployed American citizens experiencing uncommon economic hardship Introduces an unprecedented amount of funds into the American society Represents a prime opportunity for massive fraud against the government Different than Hurricane Katrina Relief

6 Possible Fraud Indicators
Connections between (false) companies: Common employer addresses Common claimant addresses Common claimants Minimal contributions by employer

7 Fraudulent Checks

8 Bogus or Misused UI Benefit Debit Cards

9 Non- Existent Companies

10 Identity Fraud

11 Common UI Schemes Identity Theft 4. Fictitious Employer 7. Pretexting
Data Mining Money Laundering Debit Card Fraud PII Fraud Check Counterfeiting 9. UI Evasion Company representatives obtain personal information under false pretenses Internal employee uses position to obtain UI data base information for purposes of committing UI fraud Illegal obtainment of UI benefits via electronic deductions Development and or use of fraudulent UI benefits Recruitment of family and friends to receive UI claim benefits based on false wages

12 Common UI Schemes - cont.
Identity Theft 4. Fictitious Employer 7. Pretexting Data Mining Money Laundering Debit Card Fraud PII Fraud Check Counterfeiting UI Evasion Bogus companies file UI claims for unsuspecting or nonexistent individuals Illegal use of personal identification information The sale of confidential information Misuse of confidential employment/wage, federal tax and medical information Negotiation of illegally obtained UI benefits for profit

13 What to do when you find or suspect fraud?
Dumpster Diving Pre-texting What to do when you find or suspect fraud? Report It!!!

14 To Whom Do You Report Fraud?
Supervisor State Department of Labor UI District Office UI National Office OIG Other authorities

15 MOU - OIG and ETA, OWS Signed June 29, 2005 and currently in effect
Established procedures for SWAs, OWS, and the OIG to address issues of fraud, vulnerability, and integrity in both State and Federal UI programs Requires each SWA to promptly notify the OIG of known substantive allegations of malfeasance, criminal misconduct, and large scale fraud

16 MOU – What to Report to OIG
Known instances or allegations of potentially illegal or fraudulent activity in excess of $5000 concerning UCFE, UCX, TAA, DUA, and extended benefit programs, with the mutual understanding that the dollar threshold may be adjusted on a State-by-State or Regional basis

17 MOU – What to Report to OIG, (cont.)
Known instances or allegations of potentially illegal or fraudulent activity in any amount concerning UI administrative fund thefts Fictitious/fraudulent employer schemes Multiple state and/international claim or tax schemes Schemes involving multi-claimant or multi-state false federal documentation Counterfeit benefit checks or multi-forgery cases

18 OIG/ETA Partnership Regularly meet to discuss and brainstorm on best practices to address fraud ETA routinely refers information on suspected or known fraud to the OIG OIG implementing process for relaying appropriate investigative results to ETA for its knowledge and consideration Participation in each others training conferences and seminars

19 DOL Incident Report

20 New OIG Fraud Efforts Postings of fraud schemes to OIG internet site
Fraud alerts to be sent to all OIG Offices and to ETA HQ Pursuit of ARRA related UI fraud according to thresholds of respective US Attorney District Offices

21 Anti-Fraud Measures Properly Dispose of/Handle Information
Shred or burn documents Secure Trash Areas Reduce unnecessary paper Archive records appropriately Log off computer when away from work station

22 Anti-Fraud Measures– cont.
Implement telephone safeguards Do not answer excessive telephone questions from suspicious sources Flip the script and question the caller Carefully document any information provided by caller Verify and cross reference information with others alleged to have provided information Notify supervisor of suspicious activity and refer to UI District Office, UI National Office and OIG

23 Who Is Committing the Fraud?
Legitimate and Bogus Employers/Businesses Average American Citizens Internal Employees Loose-knit organized crime groups Street gangs Illegal immigrants International organized crime groups Others?


25 Businesses Storeowner Maria Sanchez More than 23,000 UI checks totaling more than 7 million deposited Checks from CO, KY, NY, MP, NV and WA Multiple Claimant addresses on checks used in four other major UI investigations.

26 Internal Employees Tina “Yayoi” TURLEY
California Employment Development Department (EDD) Accounting Technician – UI Benefit

27 Link Analysis Chart Shelley Leigh TEUBNER “Best Friend of Tina
Girlfriend of Steve Fischer Leuvena Eleanor MESSER Unknown relation to TINA Written personal checks to TINA Terrie Nana TURLEY Sister of Tina Cashing UI checks Stephen Everett FISCHER Owner of PIPE, Inc. Employers claiming Wages Boyfriend of Shelly TAUBNER Frank Ramos MEJIA Owner of Dynamic Limo Cashing UI Checks Michael Lewis TOBLER Harley Jason WACK Teruko Arima – TURLEY “Mother of Tina Has Claims but not open Joseph Michael SIGALA, JR Dynamic Limousine 7909 Walerga Rd Antelope, Ca Operated by Frankie MEJIA UI Wages Cashed Pipe, Inc.9427 Elder Creek, Sacto, CA Operated by Stephen Fischer UI Wages cashed Tina “Yayoi” TURLEY EDD employee – UI Benefit Joseph BILLOTTE Boyfriend of Tina Vickey Marie BILLOTTE Former wife of Joseph and Cashing UI Claims US Dept of Labor PC / IS2005-1 Sean Ferguson, USDOL Investigator Leticia Lopez - EDD

28 Florencia 13 Street Gang Gang Member Extensive Counterfeiting of UI Checks

29 International Organized Crime Groups
Abdulla Kasem Ahmed Muthana Undercover operation with the Joint Terrorism Task Force revealed that Muthana, a target in a OIG UI case, had intentions of funneling money derived from his UI fraud to the Hezbollah militia in Lebanon.

30 Potential Violations Title 18 U.S.C: § 371 Conspiracy
§ 641 Public money, property or records § 1341 Mail Fraud § 1343 Wire Fraud § 1028 Identity Theft

31 DOL-OIG UI Investigative Results 10/01/2005 – 09/30/2009
447 Indictments 404 Convictions $107,576,853 in civil, administrative, and criminal restitution Jail sentences as high as 33 months

32 Questions? Thank you……

33 Dan Petrole, Deputy Inspector General
Tom Farrell, Assistant Inspector General, Investigations Rich Clark, Deputy Assistant Inspector General, Investigations Contact Information Tony Dixon, Director Division of Program Fraud (office) (mobile) Jon Metrey, Deputy Director Division of Special Operations (office) (mobile) Robin Blake, Deputy Director Division of Program Fraud (office) 202. (mobile) Chris Collins, Investigative Research Specialist Division of Intelligence (office)

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