Los Angeles County Man Arrested for Participation in $2.5 Million Unemployment Fraud Scheme
SACRAMENTO, Calif. — Kyn K. Naope, 39, of Sherman Oaks, was arrested today for participating in an unemployment fraud scheme with losses of over $2.5 million United States Attorney Benjamin B. Wagner announced.
A six-count indictment, returned by a federal grand jury earlier this month, alleges that between January 2008 and March 2011, Naope and others involved in the scheme 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.
This is the third indictment brought as part of this investigation. A separately pending 20-count indictment charged Kenneth Parks, Michael Taylor Sr., and three others with involvement in the fraud scheme. Parks pleaded guilty and was sentenced to five years in prison, while Taylor pleaded guilty and is awaiting sentencing. (2:12‑cr-375 TLN). Another indictment charged Donye Marcel Mitchell Sr. for his involvement in the fraud scheme, and he was sentenced to four years in prison (2:11-cr-085 GEB).
These cases are the product of an investigation by the United States Department of Labor, Office of Inspector General and California EDD – Criminal Investigations Division. Assistant United States Attorney Jared C. Dolan is prosecuting the case.
If convicted, Naope faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would 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; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.