According to federal authorities, a crime ring led by South Carolina prison inmates has been responsible for obtaining $5 million in fraudulent COVID-19 unemployment benefits.
According to South Carolina’s Acting U.S. Attorney Brook B. Andrews’ office, the five-year-long investigation has led to the indictment of 31 individuals. Out of the 31, 29 have pleaded guilty, with 14 of them already being sentenced. Unfortunately, one of the indicted suspects passed away, and one is still at large.
The ring involved not only individuals within the South Carolina Department of Corrections system but also family members and friends. They submitted fraudulent applications in several states including South Carolina, Arizona, California, North Carolina, Nevada, New Jersey, Missouri, and Pennsylvania.
“This extensive fraud scheme exploited and misused individuals’ personal information, some unknowingly, for financial gain at the expense of American taxpayers,” Andrews said in a news release. “The individuals involved showed a complete disregard for the law and used deception, manipulation, and extortion to unlawfully obtain nearly $5 million in unemployment benefits. Our agencies remain committed to holding those responsible accountable and ensuring that such fraudulent schemes do not undermine public trust in vital government programs.”
According to Andrews’ office, inmates collaborated in a scheme where they collected personal information, such as Social Security numbers and birth dates, from fellow inmates. They then used this information to fraudulently apply for COVID-19 unemployment benefits, both for themselves and other inmates.
“Some inmates provided their details willingly to the named defendants in exchange for a portion of the proceeds derived from the unemployment benefits,” Andrews’ office said. “Other inmates had no knowledge that unemployment benefits were being applied for on their behalf. The incarcerated defendants also obtained the information of unwitting individuals outside of the Department of Corrections using various extortion schemes.”
According to Andrews’ office, the offenders engaged in “Johning,” which involves using illicit telephones to urge people to email them naked or compromising images. After getting the images, they were able to contact individuals while impersonating police enforcement and extort money, Social Security numbers, and driver’s licenses.
“After the defendants applied for unemployment benefits in the names of the extortion victims and Department of Corrections inmates, the benefits were diverted to the incarcerated defendants with the assistance of the non-incarcerated defendants,” Andrews’ office said. “The non-incarcerated defendants received government checks and prepaid Visa debit cards in the mail. The non-incarcerated defendants then utilized ATM withdrawals, wire transfers, and mobile banking applications such as Zelle, Venmo, Green Dot, and Cash App to make the proceeds available to the incarcerated defendants.”
If convicted, each defendant could potentially serve up to 20 years in federal prison. Additionally, they may be required to pay a fine of up to $250,000, provide restitution, and be subject to three years of supervision after their release from prison.
“Inmates using this brazen scheme stole millions of dollars from an effort to help everyday Americans survive the COVID-19 pandemic,” state corrections Director Bryan Stirling said. “It is shameful, and the taxpayers deserve better. I am grateful to everyone involved in bringing these defendants to justice.”