U.S. Department of Labor OIG, Former Tax Preparer Pleads Guilty in Pandemic Unemployment Fraud Scheme (USAO ED-MI 02/20/2024) (2024-02-23)

Summary

A press release from the U.S. Attorney's Office for the Eastern District of Michigan, dated Tuesday, February 20, 2024, announcing that Christopher Niebel, 45, a former tax preparer who did business as "Tax Guy Chris," pleaded guilty to one count of wire fraud and one count of aggravated identity theft. According to the plea agreement, Niebel stole I-9 forms of Party City employees and applicants in approximately 2019 and later used their personal identifying information to submit Pandemic Unemployment Assistance claims to the Michigan Unemployment Insurance Agency. The release states that Niebel obtained approximately $512,000 in pandemic unemployment assistance funds. Sentencing is set for May 21, 2024, before United States District Judge Stephen J. Murphy III, with a statutory maximum of 20 years on the wire fraud count.

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PRESS RELEASE



Former Tax Preparer Pleads Guilty
in Pandemic Unemployment Fraud
Scheme
Tuesday, February 20, 2024

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

DETROIT - Christopher Niebel, a former tax preparer who did business as “Tax Guy
Chris,” pleaded guilty today to fraud and identity theft charges resulting from his
participation in a pandemic unemployment insurance fraud scheme, announced United
States Attorney Dawn N. Ison.

Joining in the announcement were Irene Lindow, Special Agent-in-Charge, Chicago
Region, U.S. Department of Labor Office of Inspector General, Special Agent in Charge
Charles Miller of the Internal Revenue Service-Criminal Investigation Detroit Field Office
and Michigan Unemployment Insurance Agency Director Julia Dale.

Niebel, 45, pleaded guilty to one count of wire fraud and one count of aggravated
identity theft arising out of a scheme in which Niebel used stolen identities to submit
fraudulent claims for unemployment insurance benefits during the Covid 19 pandemic.

According to the plea agreement, at the beginning of the pandemic, Niebel owned and
operated a tax preparation service (“Tax Guy Chris”) in Allen Park, Michigan. Niebel also
worked seasonally as a manager for Party City, a New-Jersey-based retail chain selling
party supplies. Through his employment at Party City (a job he had held for many years),
Niebel had access to the files of individuals who had worked or applied to work at the
company. These files included the U.S. Citizenship and Immigration Service’s I-9
employment verification forms of Party City employees and applicants, in which the
applicants documented their eligibility for employment in the United States. In
approximately 2019, Niebel stole a number of these I-9 forms from Party City, which
contained a substantial volume of personal identifying information (PII) of the applicants
(including names, social security numbers, and dates of birth). Niebel filed these
documents away for his future use.
Once Pandemic Unemployment Assistance (PUA) funds became available, Niebel used
the PII he had appropriated from Party City in a scheme to defraud the Michigan
Unemployment Insurance Agency by submitting fictitious claims for those benefits.
Specifically, Niebel submitted electronic applications seeking pandemic unemployment
benefits using the PII of applicants for jobs with Party City, without the authorization,
approval, or knowledge of those individuals. Niebel intentionally used the PII of
individuals who were not from Michigan in submitting these claims, correctly surmising
that such individuals would be unlikely to have submitted their own unemployment
insurance claims in Michigan and thus making detection less likely. Niebel opened
numerous bank accounts in Michigan in order to capture the PUA funds, which were
wired to those accounts. After capturing the pandemic unemployment benefits from
these fraudulent applications, Niebel spent the money on a variety of personal
expenses, including food, lodging, lottery tickets, and casino gambling,

Over the course of the scheme, Niebel obtained approximately $512,000 in pandemic
unemployment assistance funds to which he was not entitled.

“Stealing money from pandemic benefit programs is a serious offense that harms both
the intended beneficiaries and taxpayers. Doing so by stealing people’s
identities further compounds the harm to the public,” said U.S. Attorney Ison. “Today’s
guilty plea is an important step towards ensuring accountability for Mr. Niebel’s crimes.”

"Christopher Niebel fraudulently obtained unemployment insurance benefits by
submitting claims using the names of identity theft victims. Niebel directed that the
stolen benefits be deposited into bank accounts under his control. We will continue to
work with our law enforcement and state workforce agency partners to protect the
integrity of unemployment insurance benefit programs," said Irene Lindow, Special
Agent-in-Charge, Great Lakes Region, U.S. Department of Labor Office of Inspector
General.

“With today’s guilty plea, Christopher Niebel became another example of an individual
who callously took advantage of pandemic benefit programs and was caught,” said
Charles Miller, Special Agent in Charge of IRS-CI’s Detroit Field Office. “In this case,
Niebel sought to defraud the U.S. Government and steal funds from our local citizens,
for whom these funds were intended to aid and provide much needed relief during the
Covid-19 pandemic. IRS-CI, along with our law enforcement partners, remains
committed to combat and prevent this type of pandemic-related fraud.”

“It is astounding the selfish schemes fraudsters cook up using fake identities to steal
money meant for hard-working Michiganders,” said Michigan Unemployment Insurance
Agency Director Julia Dale. “At the start of the pandemic, so many people needed help
and all Chris Niebel thought about was how he could game the system for his personal
gain. His actions – and those of more than 160 others charged so far with
unemployment fraud – erodes the public’s trust. We won’t let that get in the way of
wide-ranging reforms to win back that trust and position the Michigan UIA as a national
model for fast, fair, and fraud-free service.”

Sentencing is set for May 21, 2024, before United States District Judge Stephen J.
Murphy III. Niebel faces a statutory maximum of 20 years imprisonment on the wire
fraud count. The aggravated identity theft charge carries a two-year mandatory
sentence of imprisonment, which must run consecutively to any custodial time imposed
on the wire fraud charge.

The case is being prosecuted by Assistant United States Attorney John K. Neal. The
investigation is being conducted jointly by the Department of Labor-Office of Inspector
General and the Internal Revenue Service-Criminal Investigation.

Updated February 20, 2024

Topic
CORONAVIRUS


Component
USAO - Michigan, Eastern


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