Three Georgia residents have been sentenced for their involvement in a scheme to defraud the Georgia Department of Labor (GaDOL) out of tens of millions of dollars in benefits meant to assist unemployed individuals during the pandemic.
- Macovian Doston, 31, of Vienna, Georgia, has been sentenced to 15 years in prison, followed by three years of supervised release, and ordered to pay restitution.
- Shatara Hubbard, 36, of Warner Robins, Georgia, has been sentenced to 6 years in prison, followed by three years of supervised release, and ordered to pay restitution.
- Torella Wynn, 33, of Cordele, Georgia, has been sentenced to one year in prison, followed by three years of supervised release, and ordered to pay restitution.
According to court documents and evidence, from March 2020 through November 2022, Doston, Hubbard, Wynn, and their co-conspirators filed over 5,000 fraudulent unemployment insurance claims, resulting in at least $30 million in stolen benefits.
Unemployment Insurance
Unemployment insurance (UI) is a joint state and federal program that provides benefits to eligible beneficiaries. UI benefits are intended to provide temporary financial assistance to workers who are unemployed through no fault of their own. Starting around March 2020, in response to the pandemic, several federal programs expanded UI eligibility and increased UI benefits, including Georgia.
In the early stages of the pandemic, in just two weeks, UI claims in Georgia jumped from 5,445 to 133,820, an increase of 2,300%.
The Scheme
To carry out the fraud scheme, the defendants and their co-conspirators created fictitious employers and lists of alleged employees—those lists were generated using personally identifiable information (PII) gleaned from thousands of identity theft victims. Some of the information used to create the lists was obtained by paying an employee of an Atlanta-area healthcare and hospital network to unlawfully access patient data from the hospital, as well as purchasing details from other online sources.
The information was used to submit fraudulent unemployment insurance claims on the Georgia Department of Labor website. When applying for benefits, claimants were required to provide their name, date of birth, Social Security number, and address, as well as their employer’s name, wages, and period of employment. The Department of Labor used that information to determine the level of benefits. Funds were typically disbursed via prepaid debit cards mailed to the recipients. Once activated, the debit card could be used for retail transactions, to send money to others, or to get cash at an ATM.
“The defendants orchestrated a $30 million fraud by using stolen identities to obtain thousands of unemployment insurance payouts under false pretenses,” said Matthew R. Galeotti, Head of the Justice Department’s Criminal Division. “The Criminal Division will continue to aggressively combat complex frauds that waste public funds. I thank the prosecutors and our law enforcement partners for their diligence and dedication to seeking justice for the United States.”
The scheme was investigated by several federal agencies, including the U.S. Postal Service Office of Inspector General (USPS-OIG) and IRS Criminal Investigation (IRS-CI).
The court previously sentenced four other co-conspirators charged in the November 8, 2022 indictment: Tyshion Nautese Hicks of Vienna, Georgia was sentenced to 12 years in prison; Kenya Whitehead of Cordele, Georgia was sentenced to 28 months; A’Darrion Alexander of Warner Robins, Georgia was sentenced to 18 months; and Membrish Brown, of Vienna, Georgia was sentenced to 18 months in prison.
What Fraud Victims Need To Know
This kind of scheme isn’t novel—variations have been circulating for some time, ramping up during the pandemic.
If you were approved for unemployment insurance payments but have not received them, they may have been misdirected to another address. And, if the unemployment office rejected your application for benefits because they had already received a claim under your name, a scammer may have filed for benefits using your name and personal information. Contact your state unemployment insurance program if you believe that you might be a victim.
If you receive a notice from your state unemployment office or Form 1099-G indicating you received unemployment benefit payments that you never obtained, you may be a victim of a scam—someone might have used your name and PII to apply for benefits. If you receive a Form 1099-G that you suspect is fraudulent, you should report it to your state’s official unemployment benefits agency and request a corrected Form 1099-G.
Some states, such as Pennsylvania, provide specific instructions on their websites for reporting fraud. Don’t simply ignore this—keep in mind that unemployment compensation is taxable. However, the IRS recommends that when you file your taxes, you should only include income you actually received, even if you have not yet gotten a corrected 1099-G—the processing of your tax return should not be delayed while your report of unemployment identity theft is under investigation.
If you receive a Form 1099-G that you believe is fraudulent, you do not need to file Form 14039, Identity Theft Affidavit, with the IRS. Form 14039 should only be filed if your e-filed tax return is rejected because a duplicate return has been filed with your Social Security number (or if the IRS tells you to file the form).
Other Resources
If you are the victim of unemployment fraud, you should consider opting into the IRS Identity Protection PIN program. An IP PIN is a six-digit number that helps prevent thieves from filing federal tax returns in the names of identity theft victims. The IP PIN is a voluntary program open to any taxpayer who can verify their identity.
Anyone with information about allegations of attempted fraud involving pandemic funds can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form.
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