Former state unemployment worker arrested, charged for alleged role in payment scheme
Sep 24, 2021, 3:07 PM | Updated: Sep 27, 2021, 7:59 am
A sign at the headquarters for Washington state's Employment Security Department at the Capitol in Olympia, Wash. (AP Photo/Ted S. Warren, File)
(AP Photo/Ted S. Warren, File)
A former employee with the Washington Employment Security Department (ESD) was arrested and charged on Friday, for allegedly defrauding the state out of hundreds of thousands of dollars in jobless benefits.
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A resident of Moses Lake, 47-year-old Reyes De La Cruz was hired by ESD in April 2020 to work as an intake agent to “deal with the crush of filings for pandemic unemployment benefits.” Investigators claim that he took advantage of his access to the ESD database to orchestrate fraudulent payments to himself and others.
First, he allegedly used the personal information of people in the database to have unemployment claims paid out to debit cards that he then had mailed to multiple Moses Lake addresses, where he would later retrieve them. He was terminated in October 2020, but federal investigators say he still attempted to “restart claims payments to these debit cards to take advantage of additional federal pandemic benefits.”
He was also said to have taken bribes from family, friends, or acquaintances to distribute unemployment payments using false entries, with some receiving tens of thousands of dollars at a time. A portion of those payments would then be paid back to De La Cruz.
Investigators believe he may have also made threats to terminate claims to those people if they refused to pay him his share.
De La Cruz was charged Friday for six counts of wire fraud, nine counts of bribery of an agent of an organization receiving federal funds, one count of extortion, and four counts of aggravated identity theft.
The DOJ estimates that the scheme resulted in the fraudulent distribution of at least $360,000 in pandemic-related unemployment payments, $130,000 of which is alleged to have personally enriched De La Cruz.
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The ESD came under fire in May 2020 for a separate unrelated instance of unemployment fraud, where hundreds of millions of dollars were paid out to fraudsters using stolen identities. That led to significant delays for thousands of Washingtonians who had applied for jobless benefits at the onset of the COVID-19 crisis.
A subsequent audit found that the ESD’s internal controls hadn’t been strong enough to protect against fraud, revealing that an automated process designed to flag suspicious claims had been out of commission.
