The Virginia Employment Commission believes it paid out more than $40 million in unemployment funds to persons who submitted claims on behalf of prison inmates, according to federal authorities.
In a complaint filed against two former inmates involving $51,198 in unemployment claims, an agent wrote, “This investigation involves an unemployment insurance fraud scheme wherein unemployment benefits in the millions of dollars were paid … to applicants who were actually inmates being housed at correctional facilities.”
“The VEC unknowingly paid these unemployment benefits based upon false and fraudulent information provided by individuals who submitted the applications on behalf of these inmates. The VEC estimates it paid out over $40 million to individuals who submitted claims on the behalf of ineligible inmates,” says the affidavit.
Asked for comment, a spokeswoman for the VEC wrote in an email Thursday that the agency, “assesses eligibility according to federal guidelines. The VEC works diligently to prevent and address suspected incidents of fraud, including flagging the use of multiple claimants with similar bank accounts, addresses, and/or e-mails.”
“We are aware of and tracking this specific case, but cannot provide further comment due to pending litigation,” she added.
The complaint in that case — one of an apparent number of such schemes — was filed Jan. 15. It charges two former Virginia inmates, John Paul Tierney, 35, of Virginia Beach, and Candice Lee Pearce, 30, of Boydton, with conspiracy to commit fraud in connection “with a major disaster or emergency benefit” and with fraud.
The two are accused of getting a total of roughly $75,000 in unemployment benefits approved and paid, some $51,198 of which was to be paid for five ineligible Virginia prison inmates – one of them Tierney, who was still a state prison inmate last year.
It is unclear how many, if any, of the other inmates knew their personal identification information was allegedly being used to obtain benefits in their name.
It is also unclear how much money was actually netted in the scam. Payments were made to debit cards in the inmate names and were mailed to addresses in Hopewell. Pearce allegedly retrieved at least one of the cards, but others were returned to the VEC because the Hopewell addresses were invalid.