For Immediate Release - August 31, 2012

Prison Inmate Indicted in Scheme to Steal Nearly $50,000 in Unemployment Benefits While Incarcerated

Multiple Defendants Allegedly Assisted in Scheme to Fraudulently Collect Benefits During Incarceration

BOSTON – A prison inmate and two others have been charged in an alleged scheme to fraudulently collect nearly $50,000 in unemployment benefits during his incarceration, Attorney General Martha Coakley announced today.  This case is the result of an investigation referred to the Attorney General’s Office by the Executive Office of Labor and Workforce Development’s Department of Unemployment Assistance (EOLWD\DUA). 

“We allege these defendants conspired to fraudulently collect unemployment benefits on behalf of an ineligible and incarcerated beneficiary,” AG Coakley said.  “Many people depend on these benefits just to make ends meet.  These allegations are a disturbing example of the lengths people will go to defraud the system.” 

“The successful prosecution of these charges is the result of continued collaboration between the Department of Unemployment Assistance and the Attorney General,” said Secretary of Labor and Workforce Development Joanne F. Goldstein. “We will continue to identify, investigate, and prosecute suspected fraud to protect legitimate claimants, employers, and the integrity of our system.”

A Suffolk County Grand Jury returned indictments against three defendants on August 23.  The defendants are charged as follows:

Daniel Mullaney, 42, of Everett:

  • Unemployment Fraud (71 counts)
  • Larceny Over $250 by False Pretenses (2 counts)
  • Conspiracy to Commit Unemployment Fraud (2 counts)
  • Conspiracy to Commit Larceny (2 counts)
  • Habitual Offender

Derek McCarthy, 34, of Somerville:

  • Unemployment Fraud (56 counts)
  • Larceny Over $250 by False Pretenses
  • Conspiracy to Commit Unemployment Fraud
  • Conspiracy to Commit Larceny

Stacey Carlin, 42, of Everett:

  • Unemployment Fraud (6 counts)
  • Larceny Over $250 by False Pretenses
  • Conspiracy to Commit Unemployment Fraud
  • Conspiracy to Commit Larceny (2 counts)

Authorities allege the three defendants conspired to steal thousands of dollars in unemployment benefits on behalf of Daniel Mullaney during his incarceration between March 2010 and August 2011.  The alleged scheme was initially detected and investigated by the Department of Correction and referred to EOLWD\DUA.  

According to authorities, Mullaney applied for and began receiving unemployment benefits from EOLWD\DUA in October 2009, after being separated from his employer and arranged for deposits to be made in the bank account of his ex-wife Stacey Carlin. 

In March 2010, Mullaney was incarcerated in state prison on separate charges.  During this time, Mullaney allegedly maintained contact with Carlin through phone calls while in custody, providing instructions as to what to say and how to proceed with his unemployment claim.  Authorities allege that Carlin falsely certified Mullaney’s unemployment claims for six weeks from March 2010 through April 2010, notifying EOLWD\DUA that he was not working, that he was able to work and was available for work. 

Authorities allege that Derek McCarthy, a friend and former fellow inmate of Mullaney, also assisted in the scheme.  Following his release from custody in June 2010, McCarthy allegedly opened a bank account over the Internet for the purposes of fraudulently depositing Mullaney’s unemployment benefits.  According to authorities Mullaney maintained contact with McCarthy through phone calls while in custody to discuss the false certifications and provide answers to the security questions necessary to provide certification via Internet to EOLWD\DUA.  McCarthy allegedly falsely certified Mullaney’s unemployment claims for 56 weeks from June 2010 through July 2011, notifying EOLWD\DUA that he was not working, that he was able to work and was available for work.       

As a result of this alleged scheme, the defendants fraudulently collected unemployment benefits totaling $49,953 during Mullaney’s incarceration.

The defendants are scheduled for arraignment in Suffolk Superior Court on September 5. 

AG Coakley’s Insurance and Unemployment Fraud Division works to protect consumers and the integrity of the insurance system by investigating and prosecuting those who commit fraud against all types of insurers, including the Commonwealth’s unemployment insurance and workers’ compensation system.  The prosecution of insurance fraud helps prevent the increase in premiums and taxes that are the result of fraudulent insurance claims.  In 2011, the Insurance and Unemployment Fraud Division obtained more than $5.5 million in restitution orders in 33 matters.

To report unemployment fraud to the EOLWD\DUA, call the agency’s toll free fraud hotline at (800) 354-9927 anytime, 24 hours a day.  Callers may remain anonymous.

This case is being prosecuted by Assistant Attorney General Joshua Pakstis AG Coakley’s Insurance and Unemployment Fraud Division with assistance from investigator Christopher Gabriel Attorney General’s Office and investigator Mark St. Onge from EOLWD\DUA.

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