Conspirator Sentenced to over 5 Years in Prison in Scheme to Fraudulently Obtain at Least $409,000 in Maryland Unemployment Benefits
Oversaw and Coordinated Much of the Scheme While He Was Incarcerated
Baltimore, Maryland - U.S. District Judge Richard D. Bennett sentenced Kevin Bernard Smith, age 48, of Baltimore today to 65 months in prison, followed by three years of supervised release, for conspiracy to commit access device fraud and aggravated identity theft, related to a scheme to fraudulently obtain at least $409,000 in Maryland unemployment benefits. Judge Bennett also ordered Smith to pay restitution of $88,500.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael S. Barcus, U.S. Department of Labor – Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
According to the plea agreements of Smith and co-defendants Sheila Willis and Shekia Edwards, from January 2010, until May 2012, Smith, Willis and Edwards obtained identifying information of Maryland residents, which they used to fraudulently obtain Maryland unemployment benefits.
Specifically, Smith created fictitious Maryland companies, including the Maryland Institute of Charity, K & S Autos, Supreme Cleaning Services, Nathaniel Jefferson and Atlas Moving and Hauling Company. Smith then filed fraudulent quarterly reports with the Maryland Department of Labor, Licensing, and Regulation (DLLR) under the names of fictitious Maryland companies, which falsely claimed that certain individuals had been employed and received wages at the companies during that quarter. The defendants usually used the personal identifiers of actual Maryland residents without their permission, including their names and dates of birth. However, the defendants also used the personal identifiers of Sheila Willis to falsely represent her employment status with one of the fictitious companies. Over the term of the scheme, the defendants used the quarterly contribution reports and false identities to create approximately $409,000 in available balances in the unemployment insurance tax accounts registered in the names of the fictitious companies.
The defendants would then file unemployment insurance claims with DLLR using the purported employees’ identities in order to fraudulently obtain unemployment benefits. In response to some of these claims, DLLR issued prepaid Visa debit cards which were mailed to residences associated with the defendants. The defendants used the debit cards to obtain approximately $88,500 in purchases and cash from ATMs in the Baltimore metropolitan area.
During much of the scheme to defraud, Smith was incarcerated at the Baltimore City Central Booking and Intake Facility. Despite his incarceration, his recorded conversation establishes that he continued to oversee and coordinate the use of the fraudulently obtained Visa debit cards by his co-defendants and others.
Willis and Edwards will also be required to pay $88,500 in restitution.
Sheila Denis Willis, age 48, and Shekia Denise Edwards, age 25, both of Baltimore, pleaded guilty to conspiracy to commit access device fraud. Willis also pleaded guilty to aggravated identity theft. Judge Bennett has scheduled sentencing for Willis and Edwards on January 9, 2013, and January 15, 2013, respectively, both at 3:00 p.m.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked the U.S. Department of Labor Office of Inspector General for its work in the investigation and also thanked the Maryland DLLR for its assistance in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Martin J. Clarke, who is prosecuting the case.