COVID-19 Fraud: Two Defendants Sentenced in Massive Georgia Case
Two Georgia men are sentenced for bilking taxpayers out of millions for their role in a widespread COVID-19 fraud scheme.
Prosecutors say Malcolm Jeffrey and Gerard Towns, both of Cordele, Georgia, defrauded the Georgia Department of Labor (GaDOL) out of $17 million in benefits meant to help unemployed individuals during the pandemic.
Jeffrey was sentenced to ten years in federal prison and ordered to pay nearly $17 million in restitution. Towns was sentenced to six years and ordered to pay $365,000 in restitution.
“The defendants orchestrated an egregious scheme to steal $17 million of unemployment insurance (UI) payouts using stolen identities,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “The sentencings today demonstrate that the Criminal Division will hold accountable fraudsters who steal from the public fisc.”
Stolen Identities and Fraudulent Companies
According to court documents, Jeffrey, Towns, and co-conspirators filed more than 2,500 fraudulent UI claims with the Georgia Department of Labor, resulting in $17 million in stolen benefits. The defendants created fake companies and fabricated lists of purported employees using stolen information from identity theft victims. Some of the information was bought over the internet, while other identities were obtained by paying an employee of an Atlanta health care network.
The defendants then filed the claims with GaDOL using the stolen identities, receiving prepaid debit cards that were mailed to various locations in Georgia.
The Department of Labor Office of Inspector General (DOL-OIG), the Department of Homeland Security Office of Inspector General (DHS-OIG), Internal Revenue Service Criminal Investigation (IRS-CI), U.S. Postal Service Office of Inspector General (USPS-OIG), U.S. Postal Inspection Service, U.S. Secret Service, and Homeland Security Investigations (HSI) investigated the case.
Final Sentencings in Massive Scheme
Jeffrey and Towns are the last of 12 defendants sentenced in connection with the Operation Cordele Partial, one of the largest domestic UI fraud investigations in the history of the Department of Labor. Operation Cordele Partial uncovered multiple massive schemes based in central Georgia that defrauded the GaDOL of over $45 million and involved over 20 states' unemployment insurance programs.