NEWARK, N.J. (CBSNewYork/AP) — A Newark man and several family members orchestrated an unemployment fraud scheme that raked in $2 million by filing claims using stolen identities, non-existent work histories and even the names of dead people, authorities said Friday in announcing charges against 31 people.
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Named in indictments are 35-year-old Newark resident Terry Dilligard II, whom authorities characterized as the scheme’s mastermind, and his mother, father, twin sister and former girlfriend. All five face theft, conspiracy and money laundering charges that carry maximum prison sentences of five to 20 years.
“This was an outrageous case of fraud and greed,” Attorney General Jeffrey Chiesa said.
Thirteen people had been arrested by Friday morning, and Chiesa said Dilligard had indicated that he planned to surrender.
Criminal Justice Director Stephen Taylor said the fraud first came to light when a debit-card company affiliated with a bank used by the state Department of Labor and Workforce Development noticed some accounts were receiving deposits from multiple claimants or from claimants who were deceased.
A subsequent investigation revealed a scheme in which the defendants allegedly filed the false claims primarily online, with the payouts going to Internet bank accounts controlled by Dilligard or by checks to other defendants. Many of the claims falsely asserted the claimants had previously worked at the University of Medicine of New Jersey, Newark Beth Israel Hospital or two private employers.
Of the 31 defendants, all but one is from Newark and surrounding towns. Dilligard’s father, Terry Dilligard Sr., lives in Deland, Fla., where authorities said he used his job as city commissioner to steal identities from voter registrations to use in the unemployment scam. It was not immediately known if any of the defendants had retained attorneys.
Labor Commissioner Harold Wirths said Friday that his department has implemented several anti-fraud measures since the investigation began in 2010. They include replacing paper checks with debit cards, creating a new anti-fraud unit headed by a former FBI agent and implementing a cross-checking program to prevent people from collecting unemployment after they’ve found new jobs.
Wirths said the cross-checking program has saved the state an estimated $100 million in the last year.
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