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Defendants Charged in $4M Unemployment Fraud Case

10 Nov 2021 3:56 PM | Anonymous

Defendants Charged in $4M Unemployment Fraud Case

DETROIT – Two Michigan men have been charged via criminal complaint for their roles in a large-scale, multi-state Unemployment Insurance benefit fraud scheme, announced Acting United States Attorney Saima S. Mohsin.

Joining in the announcement were Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General, Special Agent in Charge John R. Marengo, US Secret Service, Rodney Hopkins, Postal Inspector in Charge of the Detroit Division, Special Agent in Charge Sarah Kull, Internal Revenue Service-Criminal Investigation and Julia Dale, Director of the Unemployment Insurance Agency.

The complaint charges Jermaine Arnett, 34, of Pontiac, Michigan, and Terrance Calhoun, Jr., 32, also of Pontiac, Michigan, with aggravated identity theft, mail fraud, fraud using a false name and address, wire fraud, bank fraud, money laundering, and conspiracy to commit each of those acts, as well as firearm crimes.

According to the complaint, Arnett, Calhoun Jr., and one or more other individuals are responsible for filing over 500 claims for fraudulent unemployment insurance benefits across the United States, including Michigan, using just a handful of Internet Protocol addresses and mailing addresses. As described by the complaint, those false claims resulted in numerous debit cards loaded with unemployment insurance funds being mailed to addresses that Arnett, Calhoun Jr., and others controlled. The complaint alleges that Arnett, Calhoun Jr., and other individuals then systematically unloaded the funds from the cards by making large cash withdrawals at ATMs.

According to the complaint, between April and July 2020 those false claims resulted in multiple states collectively issuing more than $4 million in unemployment insurance benefits. The complaint alleges that, although a portion of the funds were electronically reclaimed before being unloaded, more than $1.7 million dollars in purchases and cash withdrawals were successfully made from the cards over a 2½ month period, and the majority of those cash withdrawals took place at ATMs located in Troy, Bloomfield Hills, and Rochester Hills, Michigan. As further described within the complaint, agents utilized ATM surveillance photos to identify Arnett and Calhoun Jr. as two of the individuals who made large cash withdrawals from ATMs using debit cards loaded with unemployment benefits issued in the names of other individuals. As also described within the complaint, when agents executed search warrants at three principal mailing addresses used for the fraudulent unemployment insurance benefit claims, including the residences of Arnett and Calhoun Jr., agents found and seized multiple debit cards in the names of numerous other individuals, distinctive clothing worn in ATM surveillance photos, firearms, and numerous documents containing the personal identification information of other individuals.

A complaint is only a charge and is not evidence of guilt.  Trial cannot be held on felony charges in a complaint.  When the investigation is completed, a determination will be made whether to seek a felony indictment.

This investigation is being conducted jointly by agents from the Department of Labor Office of the Inspector General, the United States Secret Service, the Internal Revenue Service – Criminal Investigations Division, the United States Postal Service Office of the Inspector General, and the State of Michigan -Unemployment Insurance Agency. The case is being prosecuted by Assistant United States Attorney Carl D. Gilmer-Hill. 

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Association of Certified Fraud Examiners

Long Island Chapter #43

c/o J E Ryan & Associates, Inc.

1400 Wantagh, NY  11793

516-409-4259



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