CMass Residents Charged for Stealing $488,000 in Unemployment Fraud
Thursday, April 11, 2013
Teresa Cruz Colon, age 51, of Leominster, and Atia Dobson, age 31, of Fitchburg are involved in the case, in connection with Colon’s son and Dobson’s former co-worker, Elis Reyes, age 26, a Bronx, NY man.
The three have been charged with stealing the hundreds of thousands of dollars in unemployment benefits by creating multiple false businesses and using others' identities in order to collect unemployment benefits from the Commonwealth.
The issue of welfare and unemployment benefit fraud is a hot topic in the Bay State currently, as state legislators battle over how closely the system should be monitored. Mass. Attorney General, Martha Coakley said that crimes like these “strain the state” and “hurt employers,” but many would like to see more done to stop this kind of fraud.
Benefit Fraud in MA
A special statewide grand jury returned indictments against the three, with multiple charges to the local residents. Colon received 13 counts of unemployment Fraud and 13 counts of receiving stolen property. Dobson is being charged with larceny over $250 and six counts of Identity fraud.
"We allege that Mr. Reyes and his co-defendants devised multiple schemes to steal hundreds of thousands of dollars from the Commonwealth and businesses at a time when many people are out of work and struggling to make ends meet," AG Coakley said. "These types of crimes not only hurt employers in Massachusetts, but they also put a significant strain on the state by draining resources needed to help individuals that are legitimately unemployed."
“This ‘wait and see’ attitude is letting millions of tax payer dollars go down the drain each and every day. I think we can easily say that there is over $100 million in taxpayer dollars being wasted here total,” she said. O’Connell’s proposed legislation, she says, would make it much more difficult for fraudulent behavior like those in this case.
“I have legislation filed that will stop people from fraudulently entering into the system. It’s frontend, real-time eligibility verification. When you apply, your Social Security number will be matched against 27 publically available databases to ensure your identity, your assets, employment verification are in check," she said.
She said that while some steps have been taken the reform the state’s attitude toward welfare reform, Mass. Governor Deval Patrick, has greatly ignored the issue.
At the Top in Spending
According to figures from the Institute for Truth in Accounting, the only states to outspend the Bay State are California, Florida, New York, Ohio, Pennsylvania, and Texas, landing Mass. 8th in the country for its Medicaid budget.
The Institute for Truth in Accounting also looked at the percentage of residents receiving Temporary Assistance for Needy Families (TANF) and State Supplemental Payment (SSP) recipients where the state was also above the national average, with 1.65 percent receiving these types of assistance compared to a national average of 1.22 percent.
Several Fraud Schemes
The Attorney General’s office has been investigating Colon, Dobson, and Reyes’ crimes since May of 2010.
Authorities allege that Reyes orchestrated three distinct unemployment fraud schemes between 2006 and 2010 in which he defrauded the state and also two additional criminal schemes in which he allegedly defrauded private companies.
Reyes worked for a staffing company that placed temporary workers in various businesses. One of the companies that used the staffing company was a Leominster based manufacturing company that went out of business in 2006. The manufacturing company contacted the Executive Office of Labor and Workforce Development's Department of Unemployment Assistance (EOLWD/DUA) in order to prepare the office for individuals who would apply for unemployment benefits as a result of the company's closing.
Authorities allege that Reyes used his knowledge of the company's situation to steal over $53,000 in unemployment benefits for employees who never worked at the manufacturing company. The checks issued by the EOLWD/DUA were allegedly deposited to bank accounts owned by individuals associated with Reyes, and his mother, Colon.
Two more schemes were uncovered, involving more stolen unemployment benefits. In another, Reyes created his own staffing company, Abeitus Solutions, incorporated in Leominster.
Reyes registered Albeitus with the EOLWD/DUA and authorities believe fraudulently obtained unemployment benefits for over a dozen “employees" that he claimed were terminated from his company. Based on this false information, the EOLWD/DUA paid over $228,000 in unemployment benefits to individuals who purported to work for Abeitus. Authorities allege that Reyes had these checks sent to addresses associated with himself and his mother, who investigators believe also cashed and deposited these checks.
In March 2009, Reyes incorporated another staffing company, Itane Ventures. In this instance Itane was a totally fictitious company. Authorities allege that Reyes again filed fraudulent unemployment claims for fake employees who had been laid off from Itane. As a result of these false statements, Reyes improperly received nearly $125,000 in unemployment benefits.
Authorities discovered that Reyes had also orchestrated two other schemes in which he stole from his former employers. Investigators uncovered that Reyes and his co-worker, Dobson, stole $77,000 from a temporary staffing agency where both of them had worked.
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