U.S. Department of Labor OIG, CEO of Non-Profit that Provided Mentoring Services to Public School Students Arrested on COVID Jobless Benefits Fraud Charges (USAO CD-CA 06/26/2024) (2024-07-01)

Summary

A June 26, 2024 press release from the U.S. Attorney's Office for the Central District of California announcing the arrest of Reginald Foster Jr., of Los Angeles, on a 40-count federal indictment alleging a scheme to obtain Pandemic Unemployment Assistance (PUA) benefits under the CARES Act, including with stolen identities. The release describes Foster as providing coaching to public school students through the non-profit Champs Up! LLC. According to the indictment, benefit debit cards were sent to a mailing address Foster used, prosecutors argue that 118 fraudulent applications were submitted, and almost $1.5 million was withdrawn. Shelece Counts and Isaiah Herbert Lawrence are also charged. Foster and Counts pleaded not guilty and were released on bond.

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PRESS RELEASE



CEO of Non-Profit that Provided
Mentoring Services to Public School
Students Arrested on COVID
Jobless Benefits Fraud Charges
Wednesday, June 26, 2024

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

LOS ANGELES – A South Bay man who provided lifestyle and personal development
coaching to students in public schools through a non-profit he founded was arrested
today on an indictment alleging he and his accomplices fraudulently applied for millions
of dollars in COVID-19 jobless benefits, including by using stolen identities.

Reginald Foster Jr., 37, of the Westchester neighborhood of Los Angeles, was arrested
on a 40-count federal indictment returned on June 18 alleging a scheme to fraudulently
obtain unemployment insurance benefits under the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act).

Foster was arraigned today in United States District Court in downtown Los Angeles. He
pleaded not guilty to the charges against him, and an August 20 trial date was
scheduled. A federal magistrate judge ordered Foster released on a $50,000 bond.

Foster allegedly exploited the Pandemic Unemployment Assistance (PUA) provision of
the CARES Act, which is designed to expand access to unemployment benefits to self-
employed workers, independent contractors, and others who would not otherwise have
been eligible because of the COVID-19 pandemic.

The indictment alleges that Foster submitted multiple applications for benefits with false
information that ensured that the applications would be approved and the debit cards
through which the benefits were dispersed would be sent to a mailing address he used.
Prosecutors argue that 118 fraudulent applications were submitted as part of the
scheme.
Foster then allegedly used the cards to take possession of the fraudulently obtained
benefits through transfers to his non-profit, Champs Up! LLC, and $1,000 withdrawals at
ATMs. The indictment alleges that Foster then transferred the cards to co-conspirators,
who used them to make further ATM withdrawals. Foster and his co-conspirators were
able to withdraw almost $1.5 million of the benefits. The benefits were frozen as soon as
the scheme was uncovered, preventing further losses of more than $4 million.

Two alleged co-conspirators are also charged in the indictment: Shelece Counts, 31, of
the Westlake neighborhood of Los Angeles; and Isaiah Herbert Lawrence, 30, of
Houston, Texas.

Counts was also taken into custody this morning and also was arraigned this afternoon.
She pleaded not guilty to the charges against her and an August 20 trial date was
scheduled. A federal magistrate judge ordered her released on $10,000 bond.

The indictment charges Foster, Counts, and Lawrence with one count of conspiracy to
commit mail fraud and bank fraud, five counts of aggravated identity theft, and each
face one count of use of unauthorized access devices. Foster is charged with nine counts
of mail fraud and 22 counts of bank fraud. Counts is charged with 11 counts of bank
fraud. Lawrence faces five bank fraud counts.

An indictment is merely an allegation. All defendants are presumed innocent until proven
guilty beyond a reasonable doubt in a court of law.

If convicted of all charges, Foster, Counts, and Lawrence would each face a statutory
maximum sentence of 30 years in federal prison for the conspiracy count and for each
of the bank fraud counts, and 10 years in federal prison for the use of authorized access
device counts. The mail fraud counts each carry a statutory maximum sentence of 20
years, and a conviction for aggravate identity theft will result in an additional mandatory
two-year sentence.

This matter was investigated by the United States Department of Labor Office of
Inspector General, the California Employment Development Department, and Homeland
Security Investigations. Substantial assistance was provided by the Department of
Homeland Security Office of Inspector General; the United States Secret Service; the FBI;
U.S. Customs and Border Protection Special Response Team; and the Los Angeles
Unified School District Office of Inspector General.

Assistant United States Attorney Ranee A. Katzenstein of the Criminal Appeals Section is
prosecuting this case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement
Task Force to marshal the resources of the Department of Justice in partnership with
agencies across government to enhance efforts to combat and prevent pandemic-
related fraud. The Task Force bolsters efforts to investigate and prosecute the most
culpable domestic and international criminal actors and assists agencies tasked with
administering relief programs to prevent fraud by, among other methods, augmenting
and incorporating existing coordination mechanisms, identifying resources and
techniques to uncover fraudulent actors and their schemes, and sharing and harnessing
information and insights gained from prior enforcement efforts. More information on
the Justice Department’s response to the pandemic may be found here.

Anyone with information about allegations of attempted fraud involving COVID-19 can
report it to the Department of Justice’s National Center for Disaster Fraud (NCDF)
Hotline at (866) 720-5721 or via the NCDF online complaint form.

Contact
Ciaran McEvoy
Public Information Officer
ciaran.mcevoy@usdoj.gov
(213) 894-4465

Updated June 26, 2024

Topics
CORONAVIRUS

FINANCIAL FRAUD

IDENTITY THEFT
Component
USAO - California, Central
Press Release Number: 24-150


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