For Immediate Release - October 01, 2013

Inmate Indicted in Scheme to Steal More Than $58,000 in Unemployment Benefits While Incarcerated

Defendants Allegedly Schemed to Fraudulently Collect Benefits During Incarceration

BOSTON – An inmate and his wife have been charged in connection with a scheme to fraudulently collect more than $58,000 in unemployment benefits during his incarceration, Attorney General Martha Coakley announced today. 

“We allege these defendants conspired to fraudulently collect unemployment benefits for an inmate that was clearly ineligible,” AG Coakley said. “These allegations are a disturbing example of the lengths people will go to defraud the unemployment system.”

“By partnering with the Attorney General’s Office, the Department of Unemployment Assistance is able to further investigate and address potential unemployment insurance fraud and abuse,” said Labor and Workforce Development Secretary Joanne F. Goldstein.  “It’s imperative to ensure both UI claimants and employers play by the rules as we strive to maintain a high level of unemployment insurance program integrity.”

A Suffolk County Grand Jury returned indictments against the two defendants Monday. The defendants are charged as follows:

Kevin Smith, 42, of Mattapan:

  • Unemployment Fraud (97 counts)
  • Larceny Over $250 by False Pretenses
  • Conspiracy to Commit Unemployment Fraud
  • Conspiracy to Commit Larceny
  • Habitual Offender (4 counts)

Nancy Smith, 42, of Somerville:

  • Unemployment Fraud (97 counts)
  • Larceny Over $250 by False Pretenses
  • Conspiracy to Commit Unemployment Fraud
  • Conspiracy to Commit Larceny

Authorities allege the defendants conspired to steal thousands of dollars in unemployment benefits on behalf of Kevin Smith during his incarceration between August 2009 and July 2011. The alleged scheme was initially investigated by the Executive Office of Labor and Workforce Development’s Department of Unemployment Assistance (EOLWD\DUA) and referred to the Attorney General’s Office for prosecution.  

According to authorities, Smith applied for and began receiving unemployment benefits from EOLWD\DUA in January 2009 after being separated from his employer. In August 2009 Smith was incarcerated on unrelated charges. During his incarceration Smith allegedly maintained contact with his wife Nancy through phone calls from jail, providing instructions as to what to say and how to proceed in order to process his unemployment claim. Based on this information authorities allege that Nancy Smith, or someone acting at her direction, falsely certified his unemployment claims over the phone notifying EOLWD\DUA that he was not working, that he was able to work and was available for work for 97 weeks from August 2009 through July 2011. Further investigation revealed that Nancy Smith allegedly cashed the unemployment benefit checks and shared the proceeds with Kevin Smith.

As a result of this alleged scheme, the defendants fraudulently collected unemployment benefits totaling more than $58,000 while Kevin Smith remained incarcerated.

The defendants are scheduled for arraignment in Suffolk Superior Court on October 30.

The Department of Unemployment Assistance (DUA) provides temporary assistance to unemployed workers through the Unemployment Insurance (UI) program, which is funded by employer contributions. Private employers are required to pay quarterly contributions into the trust fund based on the number of workers they employ and how often their workers have accessed UI benefits, among other factors.

DUA’s Program Integrity Department focuses on the prevention, detection and the investigation of those who defraud or attempt to defraud the unemployment insurance program. Once fraud is detected, the Program Integrity Department works aggressively with the Attorney General’s office and other agencies to recover money owed to the UI Trust Fund.

AG Coakley’s Insurance and Unemployment Fraud Division (IUFD) 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 systems. The prosecution of insurance fraud helps prevent the increase in premiums and taxes that are the result of fraudulent insurance claims. In 2012, the IUFD obtained more than $1,647,000 in restitution orders in 32 matters.

To report unemployment fraud call the EOLWD/DUA’s Fraud Hotline @ 1-800-354-9927 or visit: www.mass.gov/lwd/ui-fraud anytime, 24 hours a day. Callers may remain anonymous.

This case is being prosecuted by Assistant Attorney General Jennifer Cotter of AG Coakley’s Insurance and Unemployment Fraud Division with assistance from investigator Stephen Pfister of the Attorney General’s Office and investigator Tom Lam from EOLWD\DUA.

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