Officials: Local Family Ran $2 Million Scam

Dozens of people have been charged for their roles in scams that bilked the state’s debt-ridden unemployment insurance program of more than $2 million, the state Attorney General announced today.

Among those charged in “Operation Labor Day,” a joint initiative by the state Department of Labor and the Division of Criminal Justice, are several Newark residents, including several members of the same family.

“This was an outstanding collaborative effort,” Attorney General Jeffrey S. Chiesa said at a press conference in Newark.

Authorities today said 31 people have been indicted for scams carried out between 2006 and 2010. The funds were obtained in a variety of ways.

Terry Dilligard II, 35, of Newark, who authorities said was the ringleader, worked with a number of relatives to file unemployment claims on behalf of people falsely described as being formerly employed with the University of Medicine and Dentistry, Newark Beth Israel Hospital and two private employers.

The ring also used Social Security numbers and other information belonging to nine Florida residents, information allegedly obtained by Dilligard’s father, Terry Sr., a city commissioner in DeLand, Fla.

Also involved in the scam were Dilligard’s mother, 55-year-old Janice Allen; his twin sister Janice; a former girlfriend, 33-year-old Monique Valentine of Roselle; and 26 other people who allowed the family to use their identities in exchange for a cut of the take, which totalled $1.48 million, authorities said.

Dilligard spent much of his ill-gotten cash at Atlantic City casinos, officials also said.

Authorities also described a second indictment, unrelated to Terry Dilligard II’s alleged fraud, in which his relatives and other conspirators engineered a scheme netting $585,304 in benefits by filing false claims using the names of relatives and deceased people. Charged in that indictment are Janice Dillegard and Janice Allen, Dilligard’s sister and mother; George Dononcourt, 28, of West Orange; Terrell Evans, 37, of Irvington and Newark residents George Ross, 44, and 39-year-old Floyd Robinson.

Authorities said that as of this morning, 13 people were in custody. Terry Dillegard II was still at large but was negotiating his surrender through his attorney, officials said.

The state’s unemployment insurance program allowed beneficiaries to receive their checks through direct deposit, a service the Dilligards availed themselves of in their alleged fraud.

That decision proved to be their undoing, authorities said.

The frauds first came to light after a debit-card company affiliated with the bank used by the Dilligards noticed that some of the beneficiaries were deceased and that individual accounts were being used by multiple claimants, officials said today. The bank then tipped off the Attorney General’s office.

Asked how the scam could have lasted as long as it did without being detected, Harold J. Wirths, the commissioner of the state Department of Labor and Workforce Development, admitted that previously, New Jersey did not pursue fraud very aggressively, nor did unemployment insurance programs elsewhere in the country.

But Wirths, who was appointed by Gov. Chris Christie to take charge of an unemployment insurance program that was $2 billion in debt, said he became “pissed off” after learning of the Dilligard fraud and decided to enact proactive measures to prevent future scams. Those measures, officials said today, were among the first of their kind in the nation and recently earned New Jersey’s labor department a special award from the federal government.

“It’s harder to retrieve money once it’s out the door. We are now preventing fraud before it happens,” he said.

The Department of Labor has hired a former FBI agent to take charge of a fraud-investigation unit now being formed and paper checks have been replaced with debit cards.

Although it’s a type of fraud far less elaborate than that allegedly carried out by the Dilligards, thousands of people have also continued to file for benefits even after they have found work. The state is now checking the names on unemployment claims against those in state and national “new hire” databases.

According to Wirths, about 2,000 claimants a week were found to be employed when the state began checking the databases last year. Wirths said that while that number has dropped since then, he expressed astonishment that about 1,600 employed people a week still attempt to collect even now.

Wirths had a very blunt message for those people and anyone else inclined to imitate them.

“If you’re stealing, we’re coming after you,” Wirths said.