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Building Bridges to Success: Attacking Unemployment Insurance Fraud

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. DOL - OIG Mission.

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Building Bridges to Success: Attacking Unemployment Insurance Fraud

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  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 • 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? – 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. Identity Theft 4. Fictitious Employer 7. Pretexting Data Mining 5. Money Laundering 8. Debit Card Fraud PII Fraud 6. 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 Common UI Schemes

  12. Identity Theft 4. Fictitious Employer 7. Pretexting Data Mining 5. Money Laundering 8. Debit Card Fraud PII Fraud 6. Check Counterfeiting 9. 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 Common UI Schemes - cont.

  13. 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?

  24. 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.

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

  26. US Dept of Labor 90-3943-0005-PC / IS2005-1 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 Cashing UI Checks Vickey Marie BILLOTTE Former wife of Joseph and Cashing UI Claims Shelley Leigh TEUBNER “Best Friend of Tina Girlfriend of Steve Fischer Teruko Arima – TURLEY “Mother of Tina Has Claims but not open Terrie Nana TURLEY Sister of Tina Cashing UI checks Stephen Everett FISCHER Owner of PIPE, Inc. Employers claiming Wages Boyfriend of Shelly TAUBNER Leuvena Eleanor MESSER Unknown relation to TINA Written personal checks to TINA Frank Ramos MEJIA Owner of Dynamic Limo Cashing UI Checks Michael Lewis TOBLER Cashing UI Checks Harley Jason WACK Cashing UI Checks Joseph Michael SIGALA, JR Cashing UI Checks Sean Ferguson, USDOL Investigator Leticia Lopez - EDD Link Analysis Chart

  27. Florencia 13 Street GangGang Member Extensive Counterfeiting of UI Checks

  28. 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.

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

  30. 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

  31. Questions? Thank you……

  32. Tony Dixon, Director Division of Program Fraud202.693.5165 (office)202.207.4484 (mobile)dixon.robert@oig.dol.gov Jon Metrey, Deputy Director Division of Special Operations202.693.5165 (office)202.207.4484 (mobile)metrey.jon@oig.dol.gov Robin Blake, Deputy DirectorDivision of Program Fraud202.693.7046 (office)202. (mobile)blake.robin@oig.dol.gov Chris Collins, Investigative Research Specialist Division of Intelligence 202.693.6987 (office) collins.john@oig.dol.gov • Dan Petrole, Deputy Inspector General • Tom Farrell, Assistant Inspector General, Investigations • Rich Clark, Deputy Assistant Inspector General, Investigations Contact Information

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