Ohio Inspector General, Report of Investigation 2022-CA00003, Ohio Department of Job and Family Services (preliminary report, 2023-08-31)
Summary
Ohio Inspector General preliminary Report of Investigation, File ID No. 2022-CA00003, concerning the Ohio Department of Job and Family Services, dated August 31, 2023. The subjects named are Alana Hamilton, a former intermittent customer service representative, and Lasheta McClellan, owner of day care centers. The report states that a Franklin County Grand Jury indicted the subjects on August 30, 2023, on 19 counts, with a forfeiture specification of $3,070,066.08, and that a comprehensive report will supersede the preliminary report. It describes a February 15, 2022 referral alleging that Hamilton authorized suspicious Pandemic Unemployment Assistance payments, with a preliminary determination of $4,300,651.50 in fraudulent disbursements.
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“Ohio Inspector General, Report of Investigation 2022-CA00003, Ohio Department of Job and Family Services (preliminary report, 2023-08-31).”
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State of Ohio
Office of the Inspector General
RANDALL J. MEYER, Inspector General
Report of
Investigation
AGENCY: OHIO DEPARTMENT OF JOB & FAMILY SERVICES
FILE ID NO.: 2022-CA00003
DATE OF REPORT: AUGUST 31, 2023
The Office of the Ohio Inspector General ...
The State Watchdog
“Safeguarding integrity in state government”
The Office of the Ohio Inspector General is authorized by state law to investigate alleged
wrongful acts or omissions committed by state officers or state employees involved in the
management and operation of state agencies. We at the Inspector General’s Office
recognize that the majority of state employees and public officials are hardworking,
honest, and trustworthy individuals. However, we also believe that the responsibilities of
this Office are critical in ensuring that state government and those doing or seeking to do
business with the State of Ohio act with the highest of standards. It is the commitment of
the Inspector General’s Office to fulfill its mission of safeguarding integrity in state
government. We strive to restore trust in government by conducting impartial
investigations in matters referred for investigation and offering objective conclusions
based upon those investigations.
Statutory authority for conducting such investigations is defined in Ohio Revised Code
§121.41 through 121.50. A Report of Investigation is issued based on the findings of the
Office, and copies are delivered to the Governor of Ohio and the director of the agency
subject to the investigation. At the discretion of the Inspector General, copies of the
report may also be forwarded to law enforcement agencies or other state agencies
responsible for investigating, auditing, reviewing, or evaluating the management and
operation of state agencies. The Report of Investigation by the Ohio Inspector General is
a public record under Ohio Revised Code §149.43 and related sections of Chapter 149.
It is available to the public for a fee that does not exceed the cost of reproducing and
delivering the report.
The Office of the Inspector General does not serve as an advocate for either the
complainant or the agency involved in a particular case. The role of the Office is to
ensure that the process of investigating state agencies is conducted completely, fairly, and
impartially. The Inspector General’s Office may or may not find wrongdoing associated
with a particular investigation. However, the Office always reserves the right to make
administrative recommendations for improving the operation of state government or
referring a matter to the appropriate agency for review.
The Inspector General’s Office remains dedicated to the principle that no public servant,
regardless of rank or position, is above the law, and the strength of our government is
built on the solid character of the individuals who hold the public trust.
Randall J. Meyer
Ohio Inspector General
PRELIMINARY
REPORT OF INVESTIGATION
FILE ID NUMBER: 2022-CA00003
SUBJECT NAMES/POSITIONS: Alana Hamilton
Former Intermittent Customer Service Representative
Lasheta McClellan
Owner of Day Care Centers
AGENCY: Ohio Department of Job and Family Services
BASIS FOR INVESTIGATION: Agency Referral
ALLEGATIONS: Criminal Conduct;
Fraud Involving Agency and Department Employee.
INITIATED: February 15, 2022
DATE OF REPORT: August 31, 2023
PREFACE
The subjects in this report, Alana Hamilton and Lasheta McClellan, were indicted by a Franklin
County Grand Jury on August 30, 2023, on 19 counts including Engaging in a Pattern of Corrupt
Activity, Theft, Telecommunications Fraud, Tampering with Records, Money Laundering, and
Filing Incomplete, False and Fraudulent Tax Returns. In addition, the indictment includes a
forfeiture specification in the amount of $3,070,066.08. Due to the ongoing criminal cases, the
Office of the Ohio Inspector General is issuing this preliminary report of investigation, which
will be superseded by a comprehensive report to be released at a later date in order to ensure the
integrity of the criminal justice proceedings.
INITIAL ALLEGATION AND COMPLAINT SUMMARY
On February 15, 2022, the Ohio Department of Job and Family Services (ODJFS) referred an
allegation of wrongdoing to the Office of the Ohio Inspector General, the Ohio State Highway
Patrol (OSHP), and the U.S Department of Labor - Inspector General. ODJFS alleged that
former employee and intermittent1 Customer Service Representative (CSR) Alana Hamilton
accessed several Pandemic Unemployment Assistance (PUA) claims and authorized suspicious
payments in the PUA claims by removing holds or blocks on the claims, which she was not
authorized to do, resulting in released funds to ineligible claimants. The referral also stated
ODJFS evaluated the suspicious PUA payments in question and reported a preliminary
determination that identified $4,300,651.50 in fraudulent PUA disbursements allegedly released
to ineligible claimants due to Hamilton’s actions.
PANDEMIC UNEMPLOYMENT ASSISTANCE (PUA) INVESTIGATIVE GROUP
In 2020, because of the COVID-19 pandemic and the increased unemployment of millions of
Americans, Congress passed various programs to address the crisis, including the Pandemic
Unemployment Assistance (PUA) program. The PUA program expanded and loosened
eligibility unemployment requirements for recipients. Consequently, the Ohio Department of
Job and Family Services (ODJFS), the agency responsible for distributing PUA benefits in Ohio,
1
Intermittent employees review unemployment claims to assure claimants submit proper identification and meet
requirements to receive benefits. Intermittent employees are temporary employees hired for a definite number of
hours.
1
received an unprecedented number of unemployment compensation claims. This increase in
claims necessitated ODJFS to hire intermittent and temporary contracted workers to process the
claims. In fiscal year 2021, ODJFS disbursed approximately $7.6 billion in pandemic
unemployment benefits and later, ODJFS identified millions of dollars of the disbursals as
fraudulent. To address the rampant fraud connected to the PUA program, an investigative group
was established that consisted of the Office of the Ohio Inspector General; Ohio State Highway
Patrol; U.S. Department of Labor - Office of Inspector General; and the Ohio Department of Job
and Family Services. In addition, the Ohio Department of Taxation, Investigative Unit, provided
assistance in this investigation.
APPLICABLE RULES, POLICIES, AND PROCEDURES
Confidentiality of Ohio Department of Job and Family Services’ Information
Ohio Revised Code (ORC) §4141.21 states that, except as provided in ORC §4141.162 and
subject to ORC §4141.43, “… the information maintained by the director of job and family
services or furnished to the director by employers or employees pursuant to this chapter is for the
exclusive use and information of the department of job and family services in the discharge of its
duties and shall not be open to the public … .” As such, the Office of the Ohio Inspector General
will not include in this report any of the information obtained during the investigation received
by ODJFS in accordance with Ohio Revised Code §4141.21 which would reveal the identity of a
claimant.
BACKGROUND
The Ohio Department of Job and Family Services
The Ohio Department of Job and Family Services (ODJFS) improves the well-being of Ohio’s
workforce and families by promoting economic self-sufficiency and ensuring the safety of
Ohio’s most vulnerable citizens. The department administers programs that provide public
assistance, protects child welfare, ensures payment of child support, assists individuals with
employment and in preparing for the workforce, provides benefits to the unemployed, and
supervises the administration of federal programs and funding at the local level. The direct
2
delivery of services is administered by ODJFS, a combination of joint and individual county
departments of job and family services, and local agencies.2
The ODJFS Office of Unemployment Insurance Operations (ODJFS OUI) is responsible for
administering the State of Ohio’s Unemployment Insurance Program for workers and
businesses. The ODJFS Benefit Payment Control (ODJFS BPC) section is part of ODJFS OUI
and is responsible for promoting and maintaining, “… the integrity of the Unemployment
Insurance Program through the prevention, early detection, investigation, enforcement and
recovery of improper unemployment insurance benefits.” 3
Pandemic Unemployment Assistance Program (PUA)
The Coronavirus Aid, Relief and Economic Security (CARES) Act4 was a $2.2 trillion economic
stimulus bill passed by the 116th U.S. Congress and was signed into law on March 27,
2020. The CARES Act included provisions for the Pandemic Unemployment Assistance (PUA)
Program. The PUA program provided temporary benefits and support to self-employed
individuals, independent contractors, and others who did not qualify for traditional
unemployment benefits and had lost work due to COVID-19 related reasons. Additionally, the
PUA program provided temporary benefits and support to workers whose earnings averaged less
than $280 per week in their former jobs and permitted qualified applicants to receive these
benefits for up to 39 weeks. The CARES Act stipulated that the distribution of PUA benefits to
individuals was to end on December 31, 2020. During the COVID-19 pandemic, the ODJFS
Office of Unemployment Insurance Operations (ODJFS OUI) was responsible for the
distribution of PUA benefits to qualified individuals in Ohio.
During the period when PUA benefits were available for distribution, ODJFS posted on their
website5 the requirement that PUA applicants self-certify that they met a COVID-19 related
2 Source: Biennial budget documents.
3
Source: Benefit Payment Control | Office of Unemployment Insurance Operations | Ohio Department of Job and
Family Services.
4
The text of this legislation can be found at: Text - S.3548 - 116th Congress (2019-2020): CARES Act |
Congress.gov | Library of Congress.
5
https://jfs.ohio.gov/ouio/pdf/COVID-19-CARES-Act-Reasons.pdf
3
reason for their unemployment. The U.S. Department of Labor issued guidance and defined
PUA eligibility to three groups of people:
• Those previously receiving traditional unemployment benefits who refused to return to
work or refused an offer of work because the workplace was not in compliance with
local, state, or national health and safety standards directly related to COVID-19.
• Those who provided services to an educational institution or educational service agency
and were fully or partially unemployed due to COVID-19 related reasons.
• Those who were laid-off or had their work hours reduced due to COVID-19 reasons.
On December 27, 2020, the Consolidated Appropriations Act, 2021,6 was signed into law and
extended the expiration date set by the CARES Act for the payment of PUA benefits to qualified
applicants from December 31, 2020, to March 14, 2021. The Act further extended the number of
weeks an eligible applicant could receive these benefits from 39 weeks to 50 weeks.
Additionally, to strengthen the integrity of the PUA program, the Consolidated Appropriations
Act, 2021, amended the CARES Act by:
• Requiring states to verify the identity of applicants.
• Requiring applicants to substantiate employment or self-employment, and wages
earned or paid, to confirm eligibility for pandemic unemployment assistance no
later than 90 days from the date of application.
On March 11, 2021, the American Rescue Plan Act of 20217 was signed into law and extended
the payment of PUA benefits to qualified individuals from March 14, 2021, to September 6,
2021, and extended the maximum weeks an eligible applicant could receive these benefits from
50 to 70 weeks. The State of Ohio ended the PUA program on September 4, 2021.
PUA Claim Processing
The basic steps to process a PUA claim are:
6
The text of this legislation can be found at: H.R.133 - 116th Congress (2019-2020): Consolidated Appropriations
Act, 2021 | Congress.gov | Library of Congress.
7
The text of this legislation can be found at: H.R.1319 - 117th Congress (2021-2022): American Rescue Plan Act of
2021 | Congress.gov | Library of Congress.
4
1. The Claimant Applies for Benefits: This is the initial step in the PUA claims process and
requires the claimant to:
a. Complete a claim application questionnaire;
b. Enter their personal, demographic, and work history information;
c. Adjust the start date of the claim to the last date the claimant worked/onset of
COVID-19 date. This action is referred to as “backdating;”
d. Upload all ODJFS-required documentation into the claims system; and
e. Submit the claim.
2. ODJFS Adjudication: After the claimant submits the claim to ODJFS, the adjudication
step is the initial determination made by ODJFS on the claim based on the accuracy and
comprehensiveness of the claimant’s application and uploaded documents.
3. ODJFS Redetermination (if applicable): This is the process used when a claim was
initially adjudicated as “Ineligible” and the claimant appeals the initial decision. When
this appeal occurs, the claim is either sent to the appeals team or to the redetermination
team for further review.
4. Processing for Payment: Once the claimant is found to be eligible for benefits, ODJFS
performs steps to release benefit payments to the claimant by either direct deposit or by
“ReliaCard®,” which is Ohio’s unemployment-specific debit card.
5. Payment Release: The claimant receives their benefit payment by direct deposit, or the
funds are loaded onto their ReliaCard® for immediate use.
US Bank ReliaCard®
Ohio claimants have the option of receiving their unemployment benefits as a direct deposit into a
current bank account or in the form of a debit card which is issued as a US Bank ReliaCard ®;
Ohio’s unemployment-specific debit card. Once ODJFS determines a claim as eligible, ODJFS
contacts US Bank ReliaCard® who then mails the card to the claimant. ODJFS then deposits the
approved benefit amount to the card.
5
Claimants can make purchases with the US Bank ReliaCard ® anywhere Visa® and Mastercard®
debit cards are accepted, or can withdraw their PUA funds in the form of cash from bank ATMs.
The US Bank ReliaCard ® does not require a personal identification number or PIN for signature-
based purchases should the claimant choose credit when making the purchase. However, a PIN is
needed for debit card purchases and cash withdrawals from ATMs. The four-digit PIN is created
by the cardholder when activating the card.
SUBJECTS OF INVESTIGATION
Alana Hamilton
Alana Hamilton was employed by the Ohio Department of Job and Family Services as an
intermittent customer service representative (CSR) from December 21, 2020, to October 8, 2021.
Lasheta McClellan
Formerly from Lima, Ohio, Lasheta McClellan currently resides in Delaware, Ohio, and was the
owner of two day care centers in the greater Columbus area:
1. Start 2 Finish Learning Academy: 227 Fairway Blvd, Columbus, OH 43213
2. Start 2 Finish Learning Academy 2: 126 Pinewood Dr., Columbus, OH 43213
INVESTIGATIVE SUMMARY
On February 15, 2022, the Ohio Department of Job and Family Services (ODJFS) referred an
allegation of wrongdoing by former employee and intermittent 8 Customer Service Representative
(CSR) Alana Hamilton to the PUA Investigative Group. As a CSR, Hamilton was responsible
for reviewing PUA claims to assure claimants submitted the required and proper identity
verification and employment verification documents.
The Ohio Department of Job and Family Services made the referral to the PUA Investigative
Group due to their review of Hamilton’s activities in ODJFS’ Unemployment Framework for
8
Intermittent employees review unemployment claims to assure claimants submit proper identification and meet
requirements to receive benefits. Intermittent employees are temporary employees hired for a definite number of
hours.
6
Automated Claim & Tax Services (uFACTS). The uFACTS system maintains an audit trail for
ODJFS claim files. The uFACTS system tracks every instance of access to a claim file, when
claim information is added or altered, and identifies the individual performing the actions. The
system also tracks every instance when an individual’s claim is searched for by claim number, by
the claimant’s name, or by the claimant’s Social Security number.
According to the review conducted by ODJFS, Hamilton improperly searched for specific PUA
claimants and improperly redetermined their claims by voiding issues on their ineligible claims,
which resulted in previously denied funds being released to the ineligible claimants. ODJFS
explained to investigators that the claims they had identified as potentially fraudulent were
discovered when the department noticed that documents required to prove a claimant’s
eligibility, such as employment and identity verification documents, had not been provided in the
claims, and Hamilton improperly voided the hold on those claims, resulting in the release of
PUA funds to ineligible claimants. ODJFS records revealed that Hamilton improperly accessed
and conducted unauthorized actions in numerous claims during her ODJFS employment from
December 21, 2020, to October 8, 2021.
Investigators examined and evaluated the claims in question for any financial connections
between Hamilton and the fund recipients. In furtherance of this effort, investigators obtained
Hamilton’s bank records via subpoena. In reviewing Hamilton’s bank records, investigators
discovered a total of $57,250 in electronic payments via Zelle® deposited into Hamilton’s bank
account by the entities “Start 2 Finish Learning Academy” and “Start 2 Finish Learning
Academy 2.” A search of the Ohio Secretary of State’s website revealed that both entities are
day care centers owned by Lasheta McClellan and located in the greater Columbus area.
Because of the sum of money deposited into Hamilton’s account from the two day care centers
owned by Lasheta McClellan, investigators obtained via subpoena and reviewed McClellan’s
banking records. Subsequently, investigators discovered an additional $2,600 sent electronically
via CashApp® to Hamilton’s CashApp® account. After further analysis of McClellan’s banking
records, investigators identified that PUA funds related to 34 individual claims, including
7
McClellan’s own PUA claim, were either deposited into or associated with one of McClellan’s
12 bank accounts.
From their review of ODJFS records, investigators determined that Hamilton accessed
McClellan’s PUA claim multiple times. On May 18, 2021, Hamilton voided the fraud
designation on McClellan’s PUA claim resulting in the release of thousands in PUA funds to
McClellan. The very next day, McClellan sent a total of $1,600 via CashApp® to Hamilton.
Hamilton accessed McClellan’s claim two more times, once on June 9, 2021, to void the identity
verification issue (IDEN-IVER) and again on August 24, 2021, to redetermine a denied
employment verification (EMER) issue to eligible status. Hamilton’s actions resulted in the
improper release of $41,418 in PUA benefits to McClellan.
Investigators determined the total dollar amount of the 34 PUA claims deposited into
McClellan’s 12 bank accounts (including McClellan’s own PUA claim) is $508,165 and the total
dollar amount Hamilton received from Lasheta McClellan and the day care business accounts
McClellan controlled is $59,850.
EVIDENCE COLLECTED DURING INVESTIGATION
During the course of the investigation, investigators collected evidence from multiple sources,
including but not limited to:
Physical Search Warrants
• McClellan’s home located in Delaware, Ohio
• Two day care centers owned by McClellan:
a. Start 2 Finish Learning Academy, Columbus, OH
b. Start 2 Finish Learning Academy 2, Columbus, OH
• Hamilton’s home located in Columbus, Ohio
Electronic Search Warrants
• McClellan’s two Facebook profiles and the electronic records associated with them
• Hamilton’s Facebook profile and the electronic records associated with them
8
• McClellan’s iCloud account
• Hamilton’s iCloud account
• Subscriber information, account content, and activity for 17 Yahoo email addresses used
in claims
• Subscriber information, account content, and activity for 20 Google email addresses used
in claims
The following subpoenas were issued for the following:
• McClellan’s CashApp® account records
• Hamilton’s CashApp® account records
• McClellan’s JP Morgan Chase banking records
• Hamilton’s JP Morgan Chase banking records
• US Bank ReliaCard® cardholder information and transaction history for ReliaCards®
associated with “Hamilton and McClellan” claims as well as “McClellan only” claims
• McClellan’s AT&T phone records
• Hamilton’s T-Mobile phone records
• Subscriber information only, for an additional six Yahoo email addresses
• Subscriber information only, for an additional 18 email addresses
• Subscriber information of IP addresses associated with ‘McClellan Only” claims.
Fraud Breakdown
Hamilton/McClellan
Based on interviews and evidence collected, investigators determined that Hamilton and
McClellan were working in concert with one another in a scheme to commit fraud in the State of
Ohio. The evidence shows frequent communications between the two women regarding
activities involving fraudulent PUA claims, records tracking their activity, and payments
disbursed between the two parties. Hamilton admitted to investigators during an interview that
she was working with McClellan, stating that McClellan would charge claimants a fee to assist
them in receiving fraudulent PUA monies. McClellan would, in turn, pay Hamilton a fee for
releasing PUA benefits to ineligible claimants. Hamilton was not authorized to access the claims
9
and clear issues that resulted in monies being released. In total, 40 fraudulent claims totaling
$1,171,561 were released based on the partnership between Hamilton and McClellan.
Alana Hamilton
Investigators determined Hamilton also improperly released PUA benefits to claimants
independent of McClellan. Hamilton accessed claims with no legitimate work-related purpose
and redetermined the identity/employment verification and program eligibility holds without the
required documentation in order to release fraudulent PUA monies on the claim. Hamilton
maintained records of her activity and recorded payments received from ineligible claimants for
her actions. Bank records also confirm payments made from claimants to Hamilton for her
actions. In total, Hamilton was responsible for improperly accessing and/or releasing PUA
benefits to 104 claimants in the amount of $2,395,594.50.
Lasheta McClellan
Finally, investigators found that McClellan was also associated with fraudulent claims
independent of Hamilton. McClellan maintained detailed records that connect her to fraudulent
PUA claims. Additional records acquired during the investigation, along with claimant
interviews, further corroborate that McClellan was involved in the fraudulent release of PUA
benefits and that she received payment for her actions from ineligible applicants. Other evidence
that connected McClellan to the fraudulent activity included the use of common email addresses,
the use of physical mailing addresses associated with McClellan’s day care centers used to
receive PUA ReliaCards®, and evidence in her possession that linked her to claimants. Her
actions resulted in PUA benefits being released to 86 ineligible claimants totaling $2,339,512.
Dollar Amount of Fraudulent
Number of Fraudulent Claims
Claims
Hamilton/McClellan 40 $1,171,561
Hamilton 104 $2,395,594.50
McClellan 86 $2,339,512
Totals 230 $5,906,667.50
10
REFERRAL(S)
The Office of the Ohio Inspector General is referring this report of investigation to the Ohio
Auditor of State and has previously sent the report to the Franklin County Prosecutor’s Office for
consideration.
11
State of Ohio
Office of the Inspector General
RANDALL J. MEYER, Inspector General
NAME OF REPORT: Ohio Department of Job & Family Services
FILE ID #: 2022-CA00003
KEEPER OF RECORDS CERTIFICATION
This is a true and correct copy of the report which is required to be prepared
by the Office of the Ohio Inspector General pursuant to Section 121.42 of the
Ohio Revised Code.
Jill Jones
KEEPER OF RECORDS
CERTIFIED
August 31, 2023
Rhodes State Office Tower ◊ 30 East Broad Street – Suite 2940 ◊ Columbus, Ohio 43215-3414
Phone: 614-644-9110 ◊ FAX: 614-644-9504 ◊ Toll Free: 800-686-1525 ◊ Email: watchdog@oig.ohio.gov
Internet: watchdog.ohio.gov
MAILING ADDRESS
OFFICE OF THE INSPECTOR GENERAL
JAMES A. RHODES STATE OFFICE TOWER
30 EAST BROAD STREET – SUITE 2940
COLUMBUS, OH 43215-3414
TELEPHONE
(614) 644-9110
IN STATE TOLL- FREE
(800) 686-1525
FAX
(614) 644-9504
EMAIL
WATCHDOG@OIG.OHIO.GOV
INTERNET
WATCHDOG.OHIO.GOV
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