Nyack Resident Among 7 Postal Workers Guilty in Unemployment Benefits Fraud

Seven United States Postal Service employees in New York, including one from Nyack, have pleaded guilty to stealing unemployment insurance benefits, according to the state Labor Department. 

The Labor Department identified more than 60 persons employed by the USPS as mail carriers, mail processing clerks or casual laborers who collected more than $425,000 in Unemployment Insurance benefits while working for the Postal Service. More than 20 of these cases were referred to the United States Attorney’s Office Northern District for criminal investigation and prosecution.

"Unemployed New Yorkers and businesses are the real victims of scammers who take advantage of the unemployment insurance system," Gov. Andrew M. Cuomo said. "Fraud against our unemployment insurance system will not be tolerated. We will continue to put our efforts into preventing and investigating instances of fraud against the system."

The arrests and subsequent guilty pleas stemmed from an investigation initiated by the Labor Department's Office of Special Investigations Major Case Unit. This unit uses innovative data mining to identify complex fraud against the Unemployment Insurance program.

In this case, the unit compared federal wage data to identify those defrauding the government. The unit has identified other groups of federal and state employees, including IRS employees, who stole benefits from the Unemployment Insurance program. The Office of Special Investigations referred 771 cases last year for criminal prosecution.

The State Department of Labor’s Major Case Unit worked jointly with the United States Attorney’s Office Northern District, United States Department of Labor Office of the Inspector General and United State Postal Service Office of the Inspector General to further the investigation by analyzing USPS payroll, conducting interviews and calculating the fraud amounts. Some of the funds stolen were paid as a part of the American Recovery Reinvestment Act (ARRA) stimulus package.

The names of the individuals charged and amount of unemployment benefits stolen are as follows:

They were charged with 18 U.S.C. §1919 – false statement to obtain unemployment compensation for Federal service, in taking fraudulent UI benefits while employed at the United States Postal Service between 2009 and 2012.

The Department of Labor thanked United States Attorney Richard S. Hartunian for the office’s partnership.

"We are always vigilant in enforcing the law, even when the case, sadly, involves public servants. The actions of these defendants undermine America's trust in others serving the public and prohibit the system from benefitting those truly in need," said U.S. Attorney Richard S. Hartunian.  "Unemployment benefits are meant to provide crucial financial assistance to workers who become unemployed through no fault of their own.  We will continue to work with our law enforcement partners to stop fraudulent schemes such as these which ultimately hurt the American public."

"Today's guilty pleas send a clear message that investigating fraud against the Unemployment Insurance Program remains a high priority for the Office of Inspector General. We will continue to work with our law enforcement partners to investigate those who seek to obtain benefits to which they are not entitled," said Robert Panella, Special Agent-in-Charge of the New York Regional Office of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.

“These pleas come as a result of the excellent investigative collaboration between the U.S. Postal Service Office of Inspector General, the New York State Department of Labor Office of Special Investigations and the US Department of Labor Office of Inspector General,” said Rafael A. Medina, Special Agent in Charge of the USPSOIG’s Northeast Area Field Office. “The Postal Service prides itself in its dedicated and professional employees, but the very small percentage who stray away from those professional standards should know that law enforcement, at all levels, will always work closely to combat fraud against any federal or state program.”

Anyone with information about unemployment insurance fraud can call the Department of Labor's toll-free fraud hotline at (888) 598-2077.