Criminal Complaint — United States v. Katrina Patreese Maddox (No. 2:22-mj-30052, E.D. Mich.)

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A sealed criminal complaint (AO 91) filed February 4, 2022 in United States v. Katrina Patreese Maddox, Case 2:22-mj-30052, in the U.S. District Court for the Eastern District of Michigan, charging mail fraud under 18 U.S.C. § 1341, wire fraud under 18 U.S.C. § 1343 and aggravated identity theft under 18 U.S.C. § 1028A for May 2020 to December 2021. The affidavit of Special Agent Shanika Sanders of the Department of Labor Office of Inspector General, sworn before U.S. Magistrate Judge Kimberly G. Altman, alleges that Maddox submitted over 35 fraudulent unemployment claims to Michigan and tried to obtain benefits in her own name in five other states. It puts the approximate loss at $311,440, with a possible loss of $1,226,560. The affidavit links the claims through shared IP addresses, a phone number and an identification card used for multiple claims.

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Case 2:22-mj-30052-DUTY ECF No. 4g ,Pag@lp.d,, Filed 02/04/22 THaGSnd: 08 18 996-9555
Special Agent: Shanika Sanders Telephone: (313) 226-2573

UNITED STATES DISTRICT COURT

for the

AO 91 (Rev. 11/11) Criminal Complaint

Eastern District of Michigan

United States of America

V.
Katrina Patreese Maddox Case No, Case: 2:22—mj-30052
Assigned To : Unassigned
Assign. Date : 2/4/2022
USA V. SEALED MATTER (CMP)(CMC)
CRIMINAL COMPLAINT
I, the complainant in this case, state that the following is true to the best of my knowledge and belief.
On or about the date(s) of May 2020- December 2021 in the county of _ Wayne and elsewhere __ in the
Eastern District of Michigan , the defendant(s) violated:
Code Section Offense Description
18 U.S.C. § 1341 Mail Fraud
18 U.S.C. § 1343 Wire Fraud
18 U.S.C. § 1028A Aggravated identity theft

This criminal complaint is based on these facts:

Continued on the attached sheet. V mika K urclens—

Complainant’s signature

Shanika Sanders - Special Agent

Printed name and title

Sworn to before me and signed in my presence
and/or by reliable electronic means. / es A A He

Date: February 4, 2022 Judge’s signature

Kimberly G. Altman- U.S. Magistrate Judge

City and state: Detroit, MI

Printed name and title
Case 2:22-mj-30052-DUTY ECF No.1, PagelD.2 Filed 02/04/22 Page 2 of 16

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

Katrina Patreese Maddox, Case No. Case: 2:22-mj-30052
Assigned To : Unassigned

Assign. Date : 2/4/2022
Defendant. USA V. SEALED MATTER (CMP)(CMC)

Filed Under Seal

AFFIDAVIT IN SUPPORT OF
A CRIMINAL COMPLAINT

I, Shanika Sanders, being first duly sworn, hereby depose and state as

follows:

I. INTRODUCTION AND AGENT BACKGROUND

1. I make this affidavit in support of an application for a criminal
complaint charging the above individual with mail fraud (18 U.S.C. § 1341), wire
fraud (18 U.S.C. § 1343), and aggravated identity theft (18 U.S.C. § 1028A).

2. I am a Special Agent (SA) of the U.S. Department of Labor, Office
of Inspector General (DOL/OIG), and have been so employed since January
2016. Prior to this assignment, I was employed as an investigator in Industry
Operations for the Bureau of Alcohol, Tobacco, Firearms and Explosives for
three years. I am currently assigned to the Detroit Field Office of DOL/OIG.

3. During my years at the Department of Labor, I have conducted

numerous investigations into criminal violations of both Title 29 and Title 18 of
Case 2:22-mj-30052-DUTY ECF No.1, PagelD.3 Filed 02/04/22 Page 3 of 16

the United States Code. During this time, I have been either the lead agent or
supporting agent on several investigations involving criminal schemes targeting
the State of Michigan’s (SOM) Unemployment Insurance Agency (UIA) through
the filing of false or fictitious unemployment insurance (UJ) claims. Based on my
direct personal experience with these cases, I have become familiar with the
methods that criminals use to attack and exploit the UI systems, as well as tools
and methods criminals often utilize to facilitate that fraud.

4. This affidavit is being submitted for the limited purpose of showing
that there is sufficient probable cause for the requested criminal complaint and
arrest warrant and does not set forth all my knowledge about this matter. The
information stated below is based upon my personal observations as well as
information received from State of Michigan Fraud Investigators, and other
reliable sources.

5. This investigation concerns false and fraudulent unemployment
insurance (UI) claims filed in relation to the COVID-19 pandemic. As described
below, KATRINA PATREESE MADDOX has obtained money or property by
means of false and fraudulent pretenses and representations, facilitated using

interstate wire communications.
Case 2:22-mj-30052-DUTY ECF No.1, PagelD.4 Filed 02/04/22 Page 4 of 16

Il. BACKGROUND ON PANDEMIC UNEMPLOYMENT ASSISTANCE

6. State unemployment systems and benefits are joint state and federal
enterprises largely financed by taxes on private employers located in that state.
When state unemployment benefits are exhausted, they may be supplemented by
federal funds appropriated by the U.S. DOL. At the time of this application, the
federal government is providing significant supplemental benefits to the states
because of the COVID-19 pandemic.

7. The Families First Coronavirus Response Act (FFCRA) became law
on March 18, 2020 and provided additional flexibility for state unemployment
insurance agencies and additional administrative funding to respond to the
COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security
(CARES) Act was later signed into law on March 27, 2020, and the American
Rescue Plan Act of 2021 (ARPA) was later signed and further expanded states’
ability to provide unemployment insurance for many workers impacted by the
COVID-19 pandemic, including for workers who are not ordinarily eligible for
unemployment benefits. One such program established to accomplish that end
was the Federal Pandemic Unemployment Compensation (FPUC) program.

8. The FPUC allowed eligible individuals who were collecting certain
UI benefits, including regular unemployment compensation, to receive an

additional $600.00 in federal benefits per week for weeks of unemployment
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ending on or before July 31, 2020. Another such program, the Pandemic
Emergency Unemployment Compensation (PEUC) program, allowed those who
exhausted benefits under regular unemployment compensation or other programs
to receive up to 13 weeks of additional federally funded benefits up to December
26, 2020.

9. On December 27, 2020, the President signed legislation that extended
these programs for an additional 12 weeks. Those receiving unemployment
benefits were entitled to an additional $300.00 for each week of unemployment
until April 4, 2021. At the time of this application, the legislation and programs
detailed above ended many of these federally backed benefits early September
2021. That is all to say, the recent federal legislation and programs detailed
above allowed for a significant outlay of federal funds to flow to and through the
states to offset the recent and historic need of the American workforce for
unemployment benefits because of the COVID-19 pandemic, including the
American workforce in the SOM and in the Eastern District of Michigan
(EDMI). Collectively and colloquially, the funds flowing from these programs
have come to be known as Pandemic Unemployment Assistance (PUA).

10. In order to receive UI benefits, individuals are required to file claims
with the UI program in the state in which the individual worked. Depending

upon the state, claims may be filed in person, by telephone, or online.
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11. Inthe State of Michigan, the UI system is administered by the UIA,
which is part of the SOM’s Department of Labor and Economic Opportunity
(DLEO). Normally (in the absence of fraud), an unemployed worker initiates a
Ul claim. This can be accomplished by submitting a claim in person, over the
telephone, or via the Internet. Currently, most UI claims are filed online through
the UIA’s website. To be eligible for UI benefits, the worker must demonstrate a
certain level of earnings in several quarters immediately preceding the
application. The amount of unemployment benefits that a UI claimant might be
eligible for depends on a variety of factors, including but not limited to the length
of his or her previous employment and the amount of wages he or she earned.

12. The origin of the payment to the SOM-UIA’s bank account from the
SOM-UIA’s ASAP account originates from Michigan, where SOM-UIA is
located. Once the SOM-UIA makes this request, the Treasury Web Applications
Infrastructure (commonly referred to as the TWAI) routes the funds through one
of two Operations Centers, either the Dallas Operations Center (DOC) located in
Dallas, Texas, or the East Rutherford Operations Center (EROC) located in East
Rutherford, New Jersey. The payment path always includes routing through one
of these two centers for processing. If it is an ACH payment, the payment
generally passes through the ACH Clearinghouse, also known as The Clearing

House, in Atlanta, Georgia. Alternatively, if the ASAP payment is being made as
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a Fedwire payment, the payment path typically passes through the FRB New
York’s Clearinghouse, located at the EROC in New Jersey. Whether the SOM-
UIA’s bank account is located in the same state, or elsewhere, the funds would
have necessarily flowed through the facilities outside the state of Michigan
described above prior to arriving in the SOM-UIA’s bank account.

13. After the UIA accepts an unemployment claim, it transfers the initial
unemployment benefits into an account associated with a bank, a prepaid debit
card, or a UI debit card. Multiple states, including Michigan, provide UI benefits
to a claimant using a debit card, issued by Bank of America (BOA), which 1s
mailed to the claimant through the USPS. The unemployment benefits are loaded
onto the debit card electronically, and additional benefits are loaded onto the card
electronically every two weeks.

14. The investigation has revealed that after UI funds were processed,
subjects known and unknown used Bank of America debit cards to make cash
withdrawals from automated teller machines (ATMs) throughout metro Detroit.

Hil. DEFENDANT

15. There is probable cause to believe that KATRINA PATREESE
MADDOx, a 45-year-old female, believed to reside in Southfield, Michigan,
willfully committed both mail and wire fraud; that is, obtained money or property

through the submission of false and fraudulent UI claims, the processing and
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payment of which involved both the use of the mails and interstate wire
transmissions. Further, MADDOX made use of the personal identifying
information (PII) of multiple individuals during and in relation to the scheme to
defraud and obtain money or property.

IV. PROBABLE CAUSE

16. The investigation has revealed that the named defendant is
responsible for the submission of over 35 fraudulent UI claims to the state of
Michigan and has fraudulently tried to obtain PUA UI benefits, utilizing her own
name, in an additional five other states. On five occasions, the same Michigan
identification card was used as proof of identity, for multiple claims, in the filing
of the UI claims. Also, over 18 UI claims in this investigation did not have
reported wages earned, making them ineligible for Pandemic Unemployment
Assistance UI benefits. As a result of the scheme, approximate loss is $311,440,
with a possible loss of $1,226,560.

17. Multiple fraudulent UI claims have been linked together based upon
the Internet Protocol (IP) addresses from which the claims were submitted and/or

accessed.' Claims were also linked based upon other claim attributes such as the

' An Internet Protocol (“IP”) address is a unique code given to a computer when connected to the
Internet through an Internet Service Provider (“ISP”). An ISP assigns the IP address to an end

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physical address, and phone number, which led to the discovery of additional IP
addresses.

18. The author discovered connections to IP address 24.192.13.179
(IP.24), which itself had been used to submit 15 fraudulent UI claims in
Michigan, and accessed an additional 20 of the fraudulent Michigan UI claims in
this UI fraud scheme. Records obtained from internet service provider WOW
identified “B.M.” as the assignee of IP.24, beginning in October 2019. WOW
records further indicate 4448 Howe Road (Howe Road), Wayne, MI 48184, an
address that is linked to 26 fraudulent UI claims in this UI fraud scheme, as
discussed below.

19. Google and Yahoo records provided via a 2703d order showed that
20 email addresses used in the filing of the fraudulent UI claims provided a
phone number ending in 2316 as the recovery phone number for the email
accounts. In addition, those email addresses used IP.24 in the creation of the
email addresses themselves, and were created just days before the fraudulent

Michigan UI claims were filed.

user. The IP address, along with the date and time, usually allows the ISP to identify the location
of the end user and/or subscriber. An IP address looks like a series of four numbers, each in the
range 0-255, separated by periods (e.g., 24.192.13.179). This notation is an example of the
legacy IP version 4 (“IPv4’’) addressing.
Case 2:22-mj-30052-DUTY ECF No.1, PagelD.10 Filed 02/04/22 Page 10 of 16

20. Comcast records identified KATRINA PATREESE MADDOX as
the assignee of IP address 73.208.207.165 (IP.73), during the time of the filing of
the fraudulent UI claims. Twenty-one of the fraudulent UI claims reviewed
during this investigation were filed by IP.73. Also, one of the fraudulent UI
claims, in the name of “R.C.” used the address where IP.73 was located. 2122S
4th Avenue, Apt 105, Maywood, IL 60153, was used as the claim’s mailing
address. A records review by the author indicated that KATRINA PATREESE
MADDOxX resided at this address during 2019 and 2020.

21. | Comcast records also included the phone number ending in 2316,
which the author has verified belongs to KATRINA PATREESE MADDOX,
through searches of law enforcement databases, and bank records. This phone
number was used as the contact phone number for 17 of the fraudulent claims,
including multiple claims filed using her own name.

22. On October 27, 2021, the author, along with MUIA Regulation
Agent Kurt Eggly, interviewed IP.24 subscriber “B.M”’, at her residence. “B.M.”
admitted the Howe Road address was her previous address, which she shared
with her two children, prior to moving to her new residence Spring 2021. “B.M.”
denied knowing anything about the filing of the multiple fraudulent UI claims,
because she is in the military, and at the time of the scheme, was stationed

overseas. ““B.M.” stated she left her home in the care of her adult kids. ““B.M.”
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Case 2:22-mj-30052-DUTY ECF No.1, PagelD.11 Filed 02/04/22 Page 11 of 16

stated she recognized the names of family members; however, she did not know
the other UI claimants. “B.M.” stated she would contact her daughter “S.M.”, in
order for the author to interview “S.M.” at her home as well.

23. On November 08, 2021, the author and Regulation Agent Eggly
interviewed “S.M.”, at her mother’s home. “S.M.” stated KATRINA
PATREESE MADDOx, her aunt, contacted her while still living in Illinois, and
stated she could help “S.M.” file her PUA UI claim. “S.M.” agreed, and her
Michigan claim was filed, using IP.73, from MADDOX’S Maywood, IL address.
“S.M.” stated MADDOX moved to Michigan and lived with her, at the Howe
Road address, while her mother was overseas on military duty. While at the
Howe Road address, utilizing IP.24, KATRINA PATREESE MADDOX filed UI
claims for multiple family members. “S.M.” denied seeing anyone other than
family members in the home. “S.M.” also denied knowing any of the names,
involved in the UI fraud scheme. “S.M.” only recognized the names of family
members. “S.M.” also stated after a few months, KATRINA PATREESE
MADDOXxX eventually moved to her own place in Southfield, Michigan.

24. Another IP in this UI fraud scheme, IP address 68.34.59.22 (IP.68),
was linked to the Michigan residential address used by KATRINA PATREESE
MADDOx. Specifically, 32 UI claims made to the State of Michigan, in this UI

fraud scheme, were accessed from IP.68. Comcast records identified Maddox
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Marketing as the assignee of IP.68, beginning in August 2020. Comcast records
further indicated 27495 Franklin Road Apt 206, Southfield, MI 48034, an address
that is linked to six fraudulent UI claims in this UI fraud scheme, including four
fraudulent ones filed using MADDOX’s name. In addition, the phone number
ending in 2316, and the User ID “katrinamaddox47” was assigned to the Comcast
account.

25. On November 9, 2021, after speaking with “S.M.”, the author and
MUIA Regulation Agent Eggly went to interview KATRINA PATREESE
MADDOxX at her Southfield, MI apartment, the same apartment where IP.68 was
located. Her nephew, and the son of “B.M.”, stated she was not home. The
author gave him her phone number, but MADDOX never called the author.

26. In this UI fraud scheme, 34 of the fraudulent Michigan UI claims
were deposited onto Bank of America UI debit cards. The cards were primarily
used throughout metro Detroit at Bank of America ATMs.

27. In August 2021, the author received images from Bank of America
depicting a female resembling MADDOX making withdrawals from Bank of
America ATMs, utilizing two different UI debit cards that were not in her name.
One withdrawal on July 20, 2020, the female is seen making a withdrawal from a

Bank of America ATM in Westland, Michigan using a Michigan UI debit card, in

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the name of “S.F.”. The Michigan UI debit card was loaded with fraudulently
obtained UI funds. That debit card received $13,080 in fraudulent UI benefits.

28. On December 8, 2021, the author interviewed “‘S.F.” “S.F”
confirmed he did not file a UI claim in the State of Michigan. “S.F.” stated he
worked throughout the entire pandemic, and was not unemployed. “S.F.” denied
ever living at the address used in the filing of the claim. “S.F.” also confirmed
the SSN and DOB used to file the fraudulent UI claim did belong to him, but he
was unfamiliar with the email address or phone number used in the filing of the
claim. “S.F.” also denied providing his information to anyone for the purpose of
filing the fraudulent Michigan UI claim.

29. A female resembling MADDOX made another withdrawal on July
22, 2020 from a Bank of America ATM in Westland, Michigan using a Michigan
UI debit card, in the name of “D.W.” The Michigan UI debit card was loaded
with fraudulently obtained UI funds. That debit card received $10,040 in
fraudulent UI benefits.

30. On July 24, 2020, the same female was seen at a Wal-Mart in
Woodhaven, Michigan making a purchase using the same Michigan UI debit card
in the name of “D.W.”

31. On November 12, 2021, the author received court records from the

18" District Court in Westland, Michigan, pertaining to purchases made using a
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Michigan UI debit card, which received fraudulent UI funds. The UI card, in the
name of “R.C.” was used to pay for multiple court payments for KATRINA
PATREESE MADDOX. The District Court account included the Howe Road
address mentioned above, and included the phone number ending in 2316. On
May 20, and May 21, 2020, four payments were made to the court totaling
$705.75. This Bank of America UI debit card received $13,080 in fraudulent UI
funds from the State of Michigan.

32. On November 15, 2021, the author received records from DoorDash,
pertaining to a purchase made using a Michigan UI debit card, which received
fraudulent UI funds. The UI card, in the name of “R.S.” was used to pay for a
food order for KATRINA PATREESE MADDOX. The food was delivered to
the Howe Road address mentioned above, and included the phone number ending
in 2316. On July 10, 2020, a payment was made totaling $45.24. This Bank of
America UI debit card received $10,040 in fraudulent UI funds from the State of
Michigan.

33. On December 16, 2021, the author interviewed “R.S.” via phone.
“R.S.” confirmed he did not file the fraudulent UI claim. “R.S.” also denied
living at the Howe Road address, used in the filing of the UI claim. “R.S.”
confirmed the SSN and DOB used to file the fraudulent UI claim did belong to

him, but he was unfamiliar with the phone number or email address used in the
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filing of the claim. “R.S.” advised he was made aware of the UI claim filed in his
name, when he tried to file for UI benefits in July of this year, and was told he
had already filed. “R.S.” denied providing his information to anyone for the
purpose of filing the UI claim.

Vv. CONCLUSION

34. Based on the forgoing, there is probable cause to believe that
KATRINA PATREESE MADDOX has committed multiple federal crimes, to
include mail fraud (18 U.S.C. § 1341), wire fraud (18 U.S.C. § 1343), and
aggravated identity theft (18 U.S.C. § 1028A). These violations stem from an
ongoing scheme to defraud federal and state unemployment insurance programs
and to obtain unemployment benefits by means of false and fraudulent pretenses
and representations. This scheme involved both the wire transmission of signs
and signals in interstate commerce and the use of the mails; also, the PII of

numerous individuals was used during and in relation to the scheme.

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Respectfully submitted,

Special Agent Shanika Sanders
Department of Labor-
Office of Inspector General

Sworn to before me and signed in my
presence and/or by reliable electronic means
this 4th day of February 2022.

Kimberly G. Altman
United States Magistrate Judge

Dated: February 4, 2022

15


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