United States Attorney Benjamin B. Wagner
Eastern District of California
Five Men Arrested for $5 Million Unemployment Fraud Scheme
|FOR IMMEDIATE RELEASE||
Wednesday, November 14, 2012
Docket #: 2:12-cr-375 KJM
SACRAMENTO, Calif. — Five men have been arrested based on a 20-count indictment charging them with an unemployment fraud scheme, United States Attorney Benjamin B. Wagner announced. The October 21, 2012 indictment was sealed until the arrests of the defendants.
Kenneth Kim Parks, 50, of Pomona, and Andre Antonio Walters, 32, of Long Beach, made their initial appearances today in the U.S. District Court of Central California. Gregory Bart Martin, 31, of Lakewood; Michael Ray Taylor Sr., 46, of Fontana; and Michael Ray Taylor Jr., 27, of El Monte, were arrested last week and released on bond. This case is being tried in the Eastern District of California because the EDD checks were mailed from West Sacramento.
“These arrests send a clear message that investigating fraud against the Unemployment Insurance Program remains a high priority for the Office of Inspector General. We will continue to work with our law enforcement partners and State Workforce Agencies to investigate alleged fictitious employer schemes,” said Abel Salinas, Special Agent-in-Charge of the Los Angeles Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“Unemployment Insurance benefits are designed for people in need. So when it’s discovered that there are people who are defrauding the system for their own personal gain, EDD criminal investigators actively pursue and prosecute them for the betterment of all Californians,” said Lisa Schmith, Chief of EDD Investigation Division.
The indictment alleges that between January 2008 and March 2011, the defendants registered fictitious employers with the California Employment Development Department (EDD) and then recruited other individuals to pose as laid-off employees of those companies. These fake employees would then file for and collect unemployment insurance benefits based on the wages reported to EDD by the fictitious employers. Parks, Walters, Martin, Taylor Sr., and Taylor Jr., were responsible for managing the individual claimants they recruited and collecting a portion of the unemployment benefits from those recruits. The scheme resulted in more than $5 million in fraudulent benefits being paid out.
This case is the product of a joint investigation by the United States Department of Labor, Office of Inspector General and the Criminal Investigations Division of EDD. Assistant United States Attorney Jared C. Dolan is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentences, if convicted, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.