Press Release  Former Inmate Pleads Guilty, Sentenced to Jail in Scheme to Steal Unemployment Benefits While Incarcerated

Boston — A former inmate has pleaded guilty and been sentenced to jail in connection with a scheme to fraudulently collect more than $58,000 in unemployment benefits during his incarceration, Attorney General Maura Healey announced today. 

Kevin Smith, age 45, of Mattapan, pleaded guilty on Thursday in Suffolk Superior Court to charges of Unemployment Fraud (98 counts), Larceny Over $250 by Single Scheme, Conspiracy to Commit Unemployment Fraud, and Conspiracy to Commit Larceny. After the plea was entered, Superior Court Judge Linda Giles sentenced Smith to 18 months in the House of Correction, to be followed by three years of probation. Smith was also ordered to pay restitution of $29,015 to the Commonwealth.

“While incarcerated, this inmate orchestrated a scheme to defraud our unemployment system and steal thousands of dollars in state benefits,” AG Healey said. “This jail sentence holds this defendant accountable for his fraudulent actions and demonstrates our commitment to prosecuting those who take money from taxpayers.”

“The Department of Unemployment Assistance will not tolerate unemployment fraud that hurts both the unemployed workers who truly need assistance and the employers, who pay quarterly contributions into the Unemployment Trust Fund,” Robert Cunningham, director of the Department of Unemployment Assistance said. “DUA’s program integrity department focuses on prevention, detection, and investigation of those who defraud or attempt to defraud the unemployment insurance program. Once fraud is detected, we work aggressively with the Attorney General’s office to recover money owed to the UI Trust Fund.”           

Kevin Smith, along with his former wife, Nancy Smith, conspired to steal thousands of dollars in unemployment benefits during his incarceration between August 2009 and July 2011. The scheme was initially investigated by the Executive Office of Labor and Workforce Development’s Department of Unemployment Assistance (EOLWD\DUA) and referred to the AG’s Office for prosecution.  

According to authorities, Kevin 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 maintained contact with his former wife, Nancy, through recorded phone calls from jail. During several of those calls, Smith encouraged Nancy to continue collecting his benefits, to file a new unemployment claim in his name, and to send him money for use in his prison canteen.

Based on this information, authorities found that Smith, or someone acting on his behalf, 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 98 weeks from August 2009 through July 2011. Further investigation revealed that Nancy deposited many of the unemployment benefit checks into her personal bank account and shared some of the proceeds with Smith.

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

Nancy pleaded guilty on April 23, 2014 before Superior Court Judge Peter Krupp and was sentenced to five years of probation with the condition that full restitution be paid.

The 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 Healey’s Insurance and Unemployment Fraud Unit 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.

This case was prosecuted by Assistant Attorneys General David Clayton and Thomas Caldwell of AG Healey’s Criminal Bureau with assistance from Senior Investigator Philip Mantyla of the AG’s Insurance and Unemployment Fraud Unit, Investigator Steven Pfister of the Attorney General’s Office, and Victim Witness Advocate John Malone of the AG’s Victim Services Division.  Investigators from EOLWD\DUA also assisted in the investigation.

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