|TWC Aids Prosecution of Multi-State, Multi-Million-Dollar Fraud Scheme
AUSTIN March 15, 2019 - The Texas Workforce Commission’s (TWC) investigation of stolen identity in 2017 helped stop a multi-million-dollar unemployment insurance (UI) fraud scheme while preventing payment from TWC of any moneys based on false claims.
Richard Lach, an Illinois man, was sentenced in federal court on Feb. 5 to five years in prison for identity theft and unemployment benefits fraud, followed by three years of supervised release, and ordered to pay restitution to victims in other states.
“TWC is committed to the integrity of the UI program, and we are extremely proud of our investigators for deterring fraud and ensuring we continue to promote employers’ confidence in the program.” said TWC Chair Ruth R. Hughs. “This is just one example of our interagency efforts to safeguard the state’s Unemployment Benefits Trust Fund.”
According to court documents and statements made in court, Lach fraudulently filed claims with the Connecticut Department of Labor for unemployment benefits using the names, dates of birth and social security numbers of identity theft victims. The state deposited unemployment benefits directly to Green Dot debit cards, and Lach withdrew or otherwise spent the funds for his personal use and benefit.
Lach attempted similar schemes in 37 other states, including Texas. TWC’s contribution to the case began when its fraud investigation unit flagged a suspicious-looking UI claim as a case of identity theft in 2017. TWC placed a hold on all related UI claims from the same individual and used the information included in the UI benefits applications to track the claimant, subpoenaing banks and other entities. TWC supplied the information from those subpoenas, including surveillance footage, to other states’ workforce agencies and federal investigators, resulting in Lach’s arrest and subsequent conviction.
“This is a great victory in TWC’s ongoing efforts to detect and prosecute attempts to cheat the unemployment benefits system that is so crucial in helping eligible individuals return to work,” said TWC Commissioner Representing Labor Julian Alvarez.
This multi-state scheme affected 380 fraudulent UI claims worth approximately $3.8M. Lach’s claims in Texas totaled a potential loss to the state’s UI trust fund of $105,423. However, because of TWC’s investigation, no funds were lost.
“To anyone who is thinking about stealing a Texan’s identity to defraud the Texas Workforce Commission and the Unemployment Benefits Trust Fund, this case and others like it should give you pause,” said TWC Commissioner Representing the Public Robert Thomas.
TWC’s Regulatory Integrity Division (RID) is charged with detecting and preventing fraud, waste, and abuse. RID enforces all regulatory statutes within the jurisdiction of the agency, including tax, workforce, trade act, Skills Development Fund, Self-Sufficiency Fund, Child Care Development Fund and all other programs that TWC administers.