Colorado Unemployment Fraud Task Force investigations bring 17 criminal cases in first year of activity; more case referrals anticipated
March 4, 2022 (DENVER)—During its first year of operation, the Colorado Unemployment Fraud Task Force has referred 17 criminal cases for prosecution to Colorado’s district attorneys, the Attorney General’s Office, and the U.S. Attorney’s Office, Attorney General Phil Weiser announced today. The total loss in unemployment fraud from these cases exceeds $300,000.
Weiser launched the task force last March to address the unprecedented pandemic-related fraud against the state and to investigate and prosecute cases involving suspected identity theft and unemployment fraud.
“Since it was launched a year ago, the Unemployment Fraud Task Force has worked collaboratively with state and federal agencies to investigate those suspected of defrauding the state’s unemployment insurance program. These are complex cases that take time to develop, and now several cases have been referred to various DAs for prosecution,” Weiser said. “There’s more to come and we’ll continue to work diligently to hold those accountable who seek to cheat the state and engage in identity theft.”
Cases have been referred to District Attorney Offices in the First Judicial District (2), the 2nd Judicial District (6), the 15th Judicial District (3), the 18th Judicial District (2), the 20th Judicial District (1), and to the U.S. Attorney for the District of Colorado (2) and the Attorney General’s Office (1). The task force anticipates a significant number of case referrals to be issued over the coming months.
District Attorney Josh Vogel of the 15th Judicial District filed three cases in Prowers County District Court. Judy Abdo (2022CR13) is alleged to have filed a fraudulent unemployment claim which included the use of an altered income tax return submitted to the Colorado Department of Labor and Employment to inflate her reported income to increase her weekly amount of unemployment benefits. She is charged with two counts of Theft (F4, F5) and one count each of Cybercrime (F4), Criminal Impersonation (F6), Forgery (F5), Attempt to Influence a Public Servant (F4), Filing a False Tax Return (F5), and Unemployment-False Statement (M).
Brian Lucero (2022CR14) allegedly impersonated another individual and used their personal information to file a fraudulent unemployment claim, according to court records. He also allegedly submitted multiple altered income tax returns to CDLE to inflate his reported income to increase his weekly amount of unemployment benefits. He is charged with two counts of Theft (F4), two counts of Forgery (F5), and one count each of Cybercrime (F4), Identity Theft (F4), Criminal Impersonation (F6), Attempt to Influence a Public Servant (F4), Filing a False Tax Return (F5), and Unemployment-False Statement (M).
A third individual faces charges and a warrant has been issued for their arrest. Attorneys in the Criminal Justice Section of the Department of Law will serve as special deputy district attorneys and work under the authority of District Attorney Vogel to prosecute the Prowers County cases.
“The 15th Judicial District Attorney’s Office is proud to work in coordination with the Attorney General and the Colorado Unemployment Fraud Task Force in protecting Colorado’s unemployment insurance program from those who seek to defraud it. Collaborations like this one are particularly important in light of pandemic-related increases in fraudulent behavior,” District Attorney Vogel said.
On January 27, the District Attorney Alexis King of the First Judicial District filed a two-count complaint charging James William Emerick (2022CR200) with Theft (F5) and Cybercrime (F5). Emerick had his initial appearance in Jefferson County District Court on March 2.
“We greatly appreciate the opportunity to be part of this partnership with the Attorney General’s Office,” said District Attorney King. “Fraud and identity theft cause harm to individuals and families that can be felt for years, even decades. Collaborative efforts such as this help us hold those victimizing others accountable and make our Colorado community safer for everyone.”
The U.S. Attorney’s Office in Denver received investigative support from CDLE on two cases that resulted in guilty pleas and restitution for CDLE so that Colorado taxpayers can be made whole for fraud that the defendants were responsible for.
- Anthony Zaghab, who engaged in a scheme to defraud both the United States and the State of Colorado, pleaded guilty to wire fraud in December for fraudulently obtaining EIDL loans, PPP loans, and unemployment benefits. He was sentenced to 30 months in prison and ordered to pay $41,511.00 in restitution to CDLE and over $650,000.00 to the federal government.
- Daniel Stonebarger was charged with filing numerous fraudulent applications for EIDL loans, PPP loans, and Colorado unemployment benefits. He pleaded guilty to wire fraud. It is expected he will be ordered to pay $28,142.00 in restitution to CDLE and over $850,000.00 to the federal government. Sentencing is set for April 22 in U.S. District Court.
The CDLE has served as the primary investigative partner with key support from the Colorado Bureau of Investigation, which is skilled at conducting large investigations and cultivating and managing vast amounts of data. In addition, agents from the Colorado Department of Revenue’s Criminal Tax Enforcement Section supported investigations involving potential state tax fraud. The U.S. Attorney’s Office, the U.S. Secret Service, and the Office of the Inspector General for the U.S. Department of Labor have provided investigative resources, facilitated the flow of information, and sought restitution for CDLE in federal cases, where appropriate.
During the task force’s initial months in operation during 2021, the top priority of the task force was to prevent additional instances of fraud occurring and to release any benefits owed to legitimate claimants. This required significant investigative resources to be directed towards implementing a new identity management system and assisting claimants with evaluating and releasing fraud holds, where appropriate. These technological updates improved security protocols and deterred actors from continuing to target Colorado’s unemployment system.
By implementing the new ID.me verification system, new incidents of fraud in 2021 were dramatically reduced, and investigators were freed up to conduct criminal investigations into the suspected incidents of unemployment fraud. Many of these cases involve claimants who overstated their wages to increase benefits, unlawfully collected unemployment benefits while working, or submitted multiple claims associated with a given name, address, bank account number, or other identifiers.
An indictment or a criminal complaint is merely a formal accusation that an individual committed a crime under Colorado laws. All defendants are presumed innocent until proven guilty.