New Jersey Man Sentenced to 6.75 Years in Prison for Schemes

Summary

A press release from the U.S. Attorney's Office for the Eastern District of California dated May 22, 2023. It announces that Eric Michael Jaklitsch of Elizabeth, New Jersey, was sentenced to six years and nine months in prison for two related COVID-19 fraud cases, one in California and one in New Jersey. According to court documents, the release states, between October 2020 and December 2021 Jaklitsch filed at least 180 fraudulent unemployment claims with the California Employment Development Department using identities collected from the dark web, seeking over $7.5 million and causing actual losses of at least $3.4 million. It states that in the New Jersey case, between July 2020 and August 2020, fraudulent EIDL applications received over $1.2 million, of which Jaklitsch withdrew over $777,000 in cash.

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                                    United States Attorney’s Office
                                     Eastern District of California

 FOR IMMEDIATE RELEASE                                                Contact: Lauren Horwood
 Monday, May 22, 2023                                                     Public Affairs Officer
 EDCA.gov | @EDCAnews                                               Lauren.Horwood@usdoj.gov

    New Jersey Man Sentenced to 6.75 Years in Prison for Schemes to Steal California
        Unemployment Insurance Benefits and Economic Injury Disaster Loans

SACRAMENTO, Calif. — Eric Michael Jaklitsch, 40, of Elizabeth, New Jersey, was sentenced
today to six years and nine months in prison for two related COVID-19 fraud cases, one case
alleging wire fraud and aggravated identity theft in California and the other case alleging wire
fraud in New Jersey, U.S. Attorney Phillip A. Talbert announced.

“This defendant carried out two separate wire fraud schemes to bilk the federal government out
of millions of dollars during the Covid-19 pandemic,” U.S. Attorney Talbert said. “Today’s
sentence reflects the seriousness of the defendant’s conduct that has harmed the federal
government along with all the individuals whose information was used in the fraudulent
applications. Our office is proud to be included as a part of the California COVID-19 Fraud
Enforcement Strike Force, and we remain committed to leading investigations and vigorously
prosecuting those who commit COVID-19 fraud.”

“Eric Jaklitsch used stolen identities to fraudulently obtain millions of taxpayer dollars meant to
help unemployed workers make ends meet during the COVID-19 pandemic. As a result of
prompt action by federal law enforcement, Jaklitsch’s scheme was curtailed. Today’s sentencing
sends a clear message that those who defraud the unemployment insurance system will be held
accountable for their actions. We remain fully committed to investigating these types of crimes
with our law enforcement partners,” said Quentin Heiden, Special Agent-in-Charge, Western
Region, U.S. Department of Labor Office of Inspector General.

“The FBI, in collaboration with our state and federal partners, exposed and dismantled this
major fraud scheme. This scheme aimed to defraud the United States Government, the State of
California, and unsuspecting residents of our state. Eric Jaklitsch represents one of several
individuals who sought to take advantage of vulnerable victims during the recent pandemic,”
said FBI Sacramento Special Agent in Charge Sean Ragan. “Today’s sentencing of Jaklitsch
marks a significant milestone in the joint efforts of the FBI, the United States Attorney’s Office,
and our partners within the COVID-19 Fraud Enforcement Strike Force.”

DHS Inspector General, Dr. Joseph V. Cuffari, stated, “Eric Jaklitsch defrauded government
programs meant to help Americans at the height of the COVID-19 pandemic. DHS OIG will
continue to prioritize pandemic-related fraud investigations and work with our law enforcement
partners to bring perpetrators to justice.”
The California EDD Case

According to court documents, between October 2020 and December 2021, Jaklitsch executed
his first fraud scheme by filing at least 180 fraudulent unemployment insurance claims with
California Employment Development Department (EDD), seeking Pandemic Unemployment
Assistance and other benefits under the federal Coronavirus Aid, Relief, and Economic Security
(CARES) Act. During the scheme, Jaklitsch collected personally identifiable information (PII)
of numerous individuals from the dark web — including names, birth dates, and Social Security
numbers — and used their identities to file fraudulent unemployment insurance claims.
Typically these unemployment insurance claims were fraudulent because the claimants were not
unemployed, they were not eligible for California unemployment insurance benefits, or Jaklitsch
never had authority to file claims on their behalf.

Since at least October 2020, 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 possible fraud scheme and referred the
case to federal law enforcement.

In executing his fraudulent scheme, Jaklitsch submitted false information to ID.me. Jaklitsch
requested that the unemployment insurance benefits be mailed to various addresses under his
control. EDD approved dozens of the fraudulent claims and authorized Bank of America to mail
out debit cards containing unemployment insurance benefits. Jaklitsch then activated the debit
cards and used them to withdraw the benefits at ATMs. The scheme sought over $7.5 million in
unemployment insurance benefits and caused EDD and the United States to incur actual losses
of at least $3.4 million.

The New Jersey SBA Case

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, including the
business’s gross revenue and cost of goods sold. Qualifying entities could use EIDL funds only
on certain expenses, including fixed debts, payroll, and accounts payable.

Jaklitsch or one or more co-schemers knowingly submitted fraudulent EIDL loan applications to
the SBA in the names of entities that did not authorize the applications. The false 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 and received over $1.2 million in EIDL loan funds that
were sent to at least 14 separate bank accounts. Jaklitsch used a cellphone application to
withdraw over $777,000 in cash out of the $1.2 million.

This case was 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 prosecuted the case.

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.

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