Kansas woman was part of $113K scam in CARES funds for unemployed, businesses, FBI says
A Kansas woman was part of an apparent multi-state scam that netted more than $113,000 in ill-gotten unemployment insurance and other benefits intended to alleviate economic pains caused by the coronavirus pandemic.
The Federal Bureau of Investigation has focused the case on two suspected federal crimes: wire fraud and fraud in connection with major disaster or emergency benefits. A special agent detailed the case in a search warrant affidavit filed in U.S. District Court in Topeka.
The investigation began Sept. 4, when the Perry Police Department was called by First State Bank & Trust. The bank “alerted officers of suspicious financial activity” by a customer, referred to as “the subject” in court documents.
The Eagle is not identifying the 60-year-old woman at this time because she has not been charged with a crime.
Between May 11 and Aug. 7, that customer’s bank account received more than $113,000 in electronic deposits. The money included unemployment benefits, as well as a business loan of about $79,000.
The subject had withdrawn about $62,000 in cash before the bank account was frozen “due to the suspicious nature of the deposits and the suspicious nature of the cash withdraws.”
In an interview with law enforcement, the woman said someone named “Dennis” — whom she met online and had never met in-person — was depositing the money into her account. “Dennis” would text her instructions to withdraw cash, then package and ship the money via Federal Express.
The woman provided officers with copies of her bank statements and consented to a search of her phone. The Jefferson County Sheriff’s Office searched the device on Sept. 10, then seized it and entered it into evidence. Local law enforcement then contacted federal authorities, including the FBI.
Investigators determined the money deposited into the bank account came from payments in the name of other people. The claims were filed with her bank account information.
The source of money was unemployment insurance benefits under the Pandemic Unemployment Assistance program and the Small Business Administration Paycheck Protection Program. The unemployment insurance benefits came from Colorado, Illinois, Ohio and Washington — but not Kansas.
The funds came from the CARES Act, which provided more than $2 trillion intended for “economic relief protections to the American people from the public health and economic impacts of COVID-19,” the agent wrote.
The woman told agents that she did not file any of the unemployment insurance claims or the small business loan application. Further, she did not own a business.
It is unclear why the FBI waited until last week to apply for the search warrant when the phone has been in law enforcement possession for about four months. Despite the woman’s cooperation with investigators, it is unclear how much she understood about the scheme and whether prosecutors will seek an indictment.
The agent wrote that his affidavit was intended to establish probable cause for the warrant and that it did not contain all his knowledge about the case.
The FBI had the Topeka Police Department search the phone Tuesday, seizing messages and other data. The address to which the money was mailed is expected to be among the texts.
An investigation by USA Today found that scammers, including people in United States and foreign countries, file fraudulent claims using stolen identities. Payments rarely flow directly to the scammers, who rely on a “mule” network to launder the money.
In a Mississippi case, a retired grandmother has been criminally charged after nearly $80,000 from unemployment claims were deposited into her bank account. She put some of the cash in the mail while also buying gift cards and sending money through wire transfers.
Federal inspectors estimate that schemes targeting pandemic unemployment payments led to approximately $36 billion in losses through November.
This story was originally published January 14, 2021 at 2:49 PM.