Former State Employee Pleads Guilty to Unemployment Insurance Fraud Scheme — Eastern District of Michigan (May 12, 2025)

Summary

Press release of the U.S. Attorney's Office, Eastern District of Michigan, dated May 12, 2025. U.S. Attorney Jerome F. Gorgon Jr. announced that Timeka Johnson of Southfield pleaded guilty before United States District Judge Stephen J. Murphy, III, to stealing over $250,000 in an unemployment fraud and identity theft conspiracy while working for the State of Michigan Unemployment Insurance Agency. According to court records, Johnson used insider access to process claims in the names of third parties, closed fraud prevention triggers, uploaded false documentation and caused unauthorized debit cards to be issued. Sentencing is set for August 19, 2025, and Johnson faces a mandatory two-year sentence for aggravated identity theft and up to 20 years for conspiring to engage in wire fraud.

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Full text

PRESS RELEASE


Former State Employee Pleads Guilty to
Unemployment Insurance Fraud Scheme
Monday, May 12, 2025

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

DETROIT - A Southfield woman pleaded guilty to stealing over $250,000 as part of an
extensive unemployment fraud and identity theft conspiracy while working for the State
of Michigan Unemployment Insurance Agency, announced United States Attorney
Jerome F. Gorgon Jr.

Joining in the announcement were Joseph Cuffari, Inspector General, Department of
Homeland Security—Office of Inspector General; Megan Howell, Special Agent-in-
Charge, Great Lakes Region, U.S. Department of Labor-Office of Inspector General;
Cheyvoryea Gibson, Special Agent in Charge of the Detroit Field Office of the Federal
Bureau of Investigation; and Jason Palmer, Director of the State of Michigan
Unemployment Insurance Agency

Timeka Johnson, 43, pleaded guilty before United States District Judge Stephen J.
Murphy, III.

Johnson was an employee for the State of Michigan Unemployment Insurance Agency
(MUIA). Her duties included reviewing, processing, and verifying the legitimacy of
unemployment insurance claims.

According to court records, Johnson used her insider access to fraudulently process
claims in the names of third parties. As part of the scheme, Johnson personally:

   •   accessed third-party unemployment insurance assistance claim information
       without authorization;
   •   dismissed and improperly closed fraud prevention triggers and information
       requests relating to third-party unemployment insurance assistance;
   •   uploaded false and fraudulent documentation to support illegitimate
       unemployment insurance assistance claims, including false and fraudulent
       personal identifying information in the names of third parties;
   •   falsely and fraudulently certified the entitlement of third-party claims as being
       eligible to receive unemployment insurance assistance funds;
   •   caused at least one other Michigan Unemployment Insurance Agency employee
       to fraudulently access and alter third-party unemployment insurance assistance
       claim information for Johnson’s benefit in exchange for financial compensation
       from Johnson;
   •   caused unauthorized debit cards to be issued in the names of third-party
       unemployment insurance assistance claimants;
   •   caused improper payments to be issued in connection with unemployment
       insurance assistance claims; and
   •   conducted unauthorized cash withdrawals of unemployment insurance assistance
       issued in the name of a third party.

As a result of the conspiracy, over $250,000 in fraudulent unemployment assistance
payments were made by the State of Michigan.

Sentencing is set for August 19, 2025 before Judge Murphy. Johnson faces a mandatory
two-year sentence of imprisonment for having engaged in aggravated identity theft.
She also faces up to 20 years in prison for having conspired to engage in wire fraud.

“Timeka Johnson abused her position of trust to steal from hard-working American
taxpayers. In doing so, she also made it more difficult for legitimate claimants to receive
unemployment insurance assistance to which they are entitled. My office is committed
to aggressively prosecuting government employees who use their positions to illicitly
enrich themselves rather than serve the public,” stated U.S. Attorney Gorgon.

“Former Michigan Unemployment Insurance Agency employee Timeka Johnson
engaged in an unemployment insurance (UI) fraud scheme by facilitating the approval
of UI claims filed in the names of identity theft victims who were not entitled to such
benefits. Johnson abused her position by misusing her access to sensitive employment
information and state data systems for her own personal financial gain. We will continue
to work with our law enforcement partners to investigate those who seek to exploit this
critical benefit program, particularly when an insider threat is involved,” said Megan
Howell, Acting Special Agent-in-Charge, Great Lakes Region, U.S. Department of Labor,
Office of Inspector General.

"The guilty plea of Timeka Johnson, a former employee of the State of Michigan's
Unemployment Insurance Agency, represents a serious betrayal of public trust," said
Cheyvoryea Gibson, Special Agent in Charge of the FBI Detroit Field Office. "By abusing
her position, she exploited a critical safety net relied upon by countless residents of
Michigan. Let this serve as a warning: those who attempt to defraud public assistance
programs will face a determined and coordinated response from law enforcement. I
want to thank the FBI Detroit Area Public Corruption Task Force, our partners at the
Department of Homeland Security Office of Inspector General, the Department of Labor
Office of Inspector General, and the State of Michigan Unemployment Insurance
Agency. The FBI is committed to protecting public resources and holding accountable
those who undermine them."

“It is unacceptable when the person stealing taxpayer money is someone within UIA
who is entrusted to faithfully safeguard taxpayer money meant for those who find
themselves out of a job,” said Jason Palmer, Director of the Michigan Unemployment
Insurance Agency. “UIA will aggressively pursue every fraudster, including insiders, who
saw an opportunity to steal for their own financial gain. We work closely with our legal
partners to make sure every fraudster faces the consequences of their shameful
schemes.”

The case is being prosecuted by Assistant United States Attorney Andrew J. Yahkind. The
investigation is being conducted jointly by the Department of Homeland Security—
Office of Inspector General, Department of Labor—Office of Inspector General, the
Federal Bureau of Investigation, and the Unemployment Insurance Agency, Michigan
Department of Labor and Economic Opportunity

Updated May 12, 2025

Topic
CORONAVIRUS
Component
USAO - Michigan, Eastern


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