New Jersey Man Pleads Guilty to Fraudulent Schemes to Steal California Unemployment Insurance Benefits

Summary

A press release of the U.S. Attorney's Office for the Eastern District of California, dated Monday, January 9, 2023, announcing that Eric Michael Jaklitsch, 40, of Elizabeth, New Jersey, pleaded guilty in two related cases, one alleging wire fraud and aggravated identity theft and the other alleging wire fraud. According to court documents, between October 2020 and December 2021 Jaklitsch filed at least 78 fraudulent unemployment insurance claims with the California Employment Development Department, using fake driver's licenses verified through ID.me; the scheme sought over $2.5 million and caused actual losses exceeding $900,000. In the second case, fraudulent EIDL applications sought at least $1,280,680 and Jaklitsch withdrew at least $777,312 in cash. Sentencing by Judge William B. Shubb is scheduled for April 10, 2023.

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PRESS RELEASE


New Jersey Man Pleads Guilty to Fraudulent Schemes
to Steal California Unemployment Insurance Benefits
and to Steal Economic Injury Disaster Loans
Monday, January 9, 2023

For Immediate Release
U.S. Attorney's Office, Eastern District of California

SACRAMENTO, Calif. — Eric Michael Jaklitsch, 40, of Elizabeth, New Jersey, pleaded
guilty today to charges in two related cases, one case alleging wire fraud and
aggravated identity theft and the other case alleging wire fraud, U.S. Attorney Phillip A.
Talbert announced.

For the first case, according to court documents, between October 2020 and December
2021, Jaklitsch executed a scheme to defraud the California Employment Development
Department (EDD) by filing at least 78 fraudulent unemployment insurance claims with
EDD, seeking Pandemic Unemployment Assistance and other benefits under the
Coronavirus Aid, Relief, and Economic Security (CARES) Act. During the scheme, Jaklitsch
collected personally identifiable information (PII) of numerous individuals — including
names, birth dates, and Social Security numbers — and used their identities to file
fraudulent unemployment insurance claims. The filings represented, among other
things, that the claimants had recently lost employment or were unable to find
employment due to the COVID-19 pandemic. These unemployment insurance claims
were fraudulent because, for example, the claimants were not unemployed, they were
not eligible for California unemployment insurance benefits, or Jaklitsch did not have
authority to file claims on their behalf.

Since at least October 2021, EDD has partnered with ID.me — a private company used
by the EDD for ID verification of claimants — to implement a system for verifying
claimant identities before EDD can process unemployment insurance claims. An internal
investigation conducted by ID.me identified Jaklitsch as a person conducting a fraud
scheme and referred the case to federal law enforcement.

In executing his fraudulent scheme, Jaklitsch also submitted false information to ID.me
that allowed his fake and stolen identities to be verified. This false information included
images of fake driver’s licenses that contained photos of Jaklitsch and the names of the
purported claimants. He also submitted live photos of himself that were used to verify
the photos on the fake driver’s licenses. Once these false identities were verified,
Jaklitsch filed the fraudulent unemployment insurance claims with EDD under the same
identities.

In the fraudulent unemployment insurance applications, Jaklitsch requested that the
unemployment insurance benefits be mailed to various addresses under his control,
including his residence in New Jersey. EDD approved dozens of the fraudulent claims
and authorized Bank of America to mail out EDD debit cards containing unemployment
insurance benefits. Jaklitsch then activated the EDD debit cards and used them to
withdraw the benefits at ATMs throughout New Jersey. The scheme sought over $2.5
million in unemployment insurance benefits and caused EDD and the United States to
incur actual losses exceeding $900,000.

For the second case, according to court documents, between July 2020 and August
2020, Jaklitsch executed a scheme to defraud the Small Business Administration (SBA) by
fraudulently acquiring COVID-19 Economic Injury Disaster Loans (EIDL), which were
loans meant to provide low-interest financing and grants to small businesses, renters,
and homeowners in regions affected by declared disasters, like the COVID-19 pandemic.

To obtain an EIDL, a qualifying business applied to the SBA and provided certain
information about its operations through an online portal. The EIDL approval process
required applicants to supply minimal eligibility documentation and to affirm that the
information in the application was true and correct under the penalty of perjury and
applicable criminal statutes. The amount of an EIDL was based, in part, on the
information provided by the applicant—primarily, gross revenue minus cost of goods
sold, divided by two. Qualifying entities could use EIDL funds only on certain expenses,
including fixed debts, payroll, and accounts payable.

In furtherance of the scheme, Jaklitsch or one or more co-schemers knowingly
submitted fraudulent EIDL loan applications to the SBA for the benefit of entities that
did not authorize the applications. The false material information included, among other
things, that (a) the schemers had the authority to submit the loan applications on behalf
of the applying entities, (b) the entities’ gross revenues; (c) the entities’ costs of goods
sold; and (d) bank account information purportedly belonging to the entities. These
fraudulent applications sought at least $1,280,680. SBA approved these fraudulent
applications and caused the transfer of approximately $1,280,540 in EIDL loan funds to
at least 14 separate bank accounts held by a financial institution.

Between August and September 2020, Jaklitsch used a cellphone application to conduct
numerous cash-out transactions that debited the fraudulent EIDL loan funds held in the
14 bank accounts. Each transaction caused money to be depleted from one or more of
the 14 bank accounts, and Jaklitsch received the withdrawn cash from the stores. In
total, Jaklitsch withdrew at least $777,312 in cash.

This case is the product of an investigation by the Federal Bureau of Investigation, the
Department of Labor – Office of the Inspector General, the Department of Homeland
Security – Office of the Inspector General – Covid Fraud Unit, and the California
Employment Development Department (EDD) – Investigation Division. Assistant U.S.
Attorney Denise N. Yasinow is prosecuting the case.

Jaklitsch is scheduled to be sentenced by U.S. District Judge William B. Shubb on April
10, 2023. Jaklitsch faces a maximum statutory penalty of 20 years in prison and a
$250,000 fine on each of the wire fraud counts. He also faces a two-year mandatory
prison sentence for the aggravated identity theft count, which must run consecutive to
any sentence received on the wire fraud counts. The actual sentence, however, will be
determined at the discretion of the court after consideration of any applicable statutory
factors and the Federal Sentencing Guidelines, which take into account a number of
variables.

This effort is part of a California COVID-19 Fraud Enforcement Strike Force operation,
one of three interagency COVID-19 fraud strike force teams established by the U.S.
Department of Justice. The California Strike Force combines law enforcement and
prosecutorial resources in the Eastern and Central Districts of California and focuses on
large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and
transnational actors. The strike forces use prosecutor-led and data analyst-driven teams
to identify and bring to justice those who stole pandemic relief funds.
Updated January 9, 2023


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