Former Washington State Employment Security Department worker sentenced to five years in prison for wire fraud

Summary

A press release from the U.S. Attorney's Office for the Western District of Washington dated September 16, 2022. It announces that Reyes De La Cruz, III, of Moses Lake, a former Employment Security Department intake agent, was sentenced in U.S. District Court in Tacoma to five years in prison for wire fraud, bribery and aggravated identity theft in a scheme to distribute at least $360,000 in pandemic-related unemployment benefits. According to records filed in the case, De La Cruz used access to the ESD claims database between July 3, 2020, and March 15, 2021, accepted bribes in at least ten instances for nearly $21,000 in kickbacks, and filed claims using other people's information, defrauding ESD of more than $113,000. U.S. District Judge Robert J. Bryan imposed the sentence.

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                                       Department of Justice
                                         U.S. Attorney’s Office
                                    Western District of Washington


FOR IMMEDIATE RELEASE                                                       Friday, September 16, 2022

Former Washington State Employment Security Department
  worker sentenced to five years in prison for wire fraud,
          bribery, and aggravated identity theft
Hired to help with the pandemic overload, he committed fraud and demanded
              kickbacks for pushing through fraudulent claims
Tacoma – A former employee of Washington State’s Employment Security Department (ESD) was
sentenced today in U.S. District Court in Tacoma to five years in prison for three federal felonies for
his scheme to exploit his employment for personal enrichment and to fraudulently distribute at least
$360,000 in pandemic-related unemployment benefits, announced U.S. Attorney Nick
Brown. Reyes De La Cruz, III, 48, of Moses Lake, Washington, personally enriched himself by at
least $130,000 with his scheme. At the sentencing hearing U.S. District Judge Robert J. Bryan said,
“This was a serious offense…damaging to our system of government and to individuals.”

“Mr. De La Cruz’s betrayal of public trust is particularly egregious, since he was hired to help people
survive during a time of national crisis,” said U.S. Attorney Nick Brown. “Instead, through multiple
acts of demanding bribes, falsifying records, stealing identities – he stole from the public to line his
own pockets. The Department of Justice is working relentlessly to combat pandemic fraud, and to
hold people who defrauded the government accountable.”

"Public servants must be held to higher standard.” said Richard A. Collodi, Special Agent in Charge
of the FBI’s Seattle field office. “Mr. De La Cruz took advantage of a program meant to assist
struggling families during the pandemic. He exploited his position to benefit himself, which makes
his actions that much more appalling. This case demonstrates the commitment by the FBI and U.S.
Attorney’s Office to reinforce trust and hold accountable those who manipulate for personal gain.”



According to records filed in the case, De La Cruz was hired as an intake agent in April 2020 to help
the Employment Security Department (ESD) deal with the crush of filings for pandemic
unemployment benefits. De La Cruz had previously worked for ESD, from 1996 to 2003.

Between July 3, 2020, and March 15, 2021, De La Cruz used his access to the ESD claims database to
defraud the benefits system in multiple ways. In at least ten instances, De La Cruz accepted bribes in
exchange for engineering benefit payments for his friends, family, or acquaintances by making false
entries in the claims database. In many cases, the person did not qualify for benefits, but De La Cruz
manipulated the claims database so that the claimants received lumpsum retroactive payments that
sometimes amounted to tens of thousands of dollars. The claimants would then pay De La Cruz a
portion of the lumpsum. The bribes ranged from $500-$6,500. In total, De La Cruz enriched
himself nearly $21,000 through kickback payments.

In some instances, when claimants refused or resisted paying De La Cruz, he threatened to terminate
the claim if they did not pay him.
De La Cruz filed at least four claims using other people’s personal information without authorization
and then had the benefits paid to debit cards that were mailed to Moses Lake, Washington, addresses
where De La Cruz could retrieve them. Even after his employment with ESD terminated on October
1, 2020, De La Cruz attempted to restart claims payments to these debit cards to take advantage of
additional federal pandemic benefits. De La Cruz went so far as to impersonate a claimant in
recorded phone calls with ESD and a bank. He impersonated another claimant in handwritten
correspondence that he then faxed to ESD. In this way he defrauded ESD of more than $113,000.

The Employment Security Department uncovered evidence of fraud, terminated De La Cruz, and
referred the case to the Department of Labor Office of Inspector General. The FBI joined the
investigation.

“Reyes De La Cruz was a state employee who was trusted to handle sensitive employment
information. He abused that trust for personal gain. This sentencing sends a strong message to those
who defrauded our nation’s unemployment system during a time when unemployment benefits were
needed most. Protecting the integrity of the unemployment insurance program remains one of our
highest priorities. We will continue to work with our law enforcement partners to safeguard
unemployment benefits for those who need them and to bring to justice those who commit
unemployment insurance fraud”, said Quentin Heiden, Special Agent-in-Charge of the U.S.
Department of Labor, Office of Inspector General, Los Angeles Region.

This case is being prosecuted by Assistant United States Attorneys Cindy Chang and Seth Wilkinson.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to
marshal the resources of the Department of Justice in partnership with agencies across government
to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to
investigate and prosecute the most culpable domestic and international criminal actors and assists
agencies tasked with administering relief programs to prevent fraud by, among other methods,
augmenting and incorporating existing coordination mechanisms, identifying resources and
techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information
and insights gained from prior enforcement efforts. For more information on the Department’s
response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by
calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-
5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-
disaster-complaint-form.
Topic(s):                                             USAO - Washington, Western
Coronavirus
Public Corruption                                     Contact:
Disaster Fraud                                        Press contact for the U.S. Attorney’s Office is
Financial Fraud                                       Communications Director Emily Langlie at
                                                      (206) 553-4110 or Emily.Langlie@usdoj.gov
Component(s):


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