U.S. Department of Labor OIG, State Contractor Pleads Guilty in $3 million Unemployment Fraud Scheme (USAO ED-MI 06/30/2021) (2021-07-06)

Summary

A press release from the U.S. Attorney's Office, Eastern District of Michigan, dated June 30, 2021, announcing that Brandi Hawkins, 40, a Detroit woman and contract employee of the State of Michigan Unemployment Insurance Agency, pleaded guilty before United States District Judge Paul D. Borman in an unemployment insurance fraud scheme. According to court records, between April and June of 2020 Hawkins accepted bribes from outside actors to release false claims, using insider access to release payment on over seven-hundred claims. The release states that the conduct resulted in the fraudulent disbursement of approximately $3.8 million, and that the loss would have been over $12 million had every claim been disbursed in full. Over $200,000 in cash was seized at Hawkins' residence, and sentencing was set for October 28, 2021.

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Full text

                                   United States Attorney’s Office
                                    Eastern District of Michigan

FOR IMMEDIATE RELEASE                                                         Contact: Gina Balaya
June 30, 2021                                                                 Public Affairs Officer
EDMI.gov | @USAO_MIE                                                        Gina.Balaya@usdoj.gov

           State Contractor Pleads Guilty in $3 million Unemployment Fraud Scheme

A Detroit woman pleaded guilty today for her role in a multi-million dollar unemployment insurance
fraud scheme aimed at defrauding the State of Michigan and the U.S. Government of funds earmarked
for unemployment assistance during the COVID19 pandemic, announced Acting United States Attorney
Saima Mohsin.

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 Douglas J. Zloto, US Secret
Service, Juan Vargas, Acting Postal Inspector in Charge of the Detroit Division, Special Agent in Charge
Timothy Waters, Federal Bureau of Investigation, Acting Special Agent in Charge Kelly Lewis, Internal
Revenue Service-Criminal Investigation and Liza Estlund Olson, acting director of the Unemployment
Insurance Agency.

Brandi Hawkins, 40, pleaded guilty before United States District Judge Paul D. Borman. A sentencing
date was set for October 28, 2021 where she faces a statutory maximum penalty of 20 years in federal
prison.

According to court records, Brandi Hawkins was a contract employee for the State of Michigan
Unemployment Insurance Agency. Her duties included reviewing, processing and verifying the
legitimacy of unemployment insurance claims. Between April and June of 2020, HAWKINS worked with
outside actors, known and unknown to law enforcement. Daily, those actors entered numerous false
claims into the State of Michigan’s Unemployment Insurance Agency system, many of which were filed
using stolen identities. These actors communicated with HAWKINS by cellular telephone calls and texts.
HAWKINS accepted bribes in return for releasing many of these claims. HAWKINS used her insider
access to fraudulently release payment on over seven-hundred claims, more than ten of which involved
claims filed using stolen identities. HAWKINS’s actions resulted in the fraudulent disbursement of
approximately $3.8 million of federal and state funds intended for unemployment assistance during the
pandemic. Had every fraudulent claim released by HAWKINS been disbursed in full, the resulting loss of
federal and state funds would have been over $12 million.

During the execution of a search warrant at Hawkins’ residence, over $200,000 in cash was seized.
Hawkins used proceeds from her crimes to purchase high-end handbags and other luxury goods.

“Hawkins exploited the pandemic to defraud the State of Michigan and United States for her own
personal gain,” said Acting US Attorney Mohsin. “Our office continues to focus on identifying and
prosecuting those individuals who seek to divert funds intended for those in need during what has been
a very difficult period of unemployment.”

“Facilitating a fraudulent scheme to enrich yourself and others by stealing unemployment compensation
earmarked for pandemic assistance is a vicious crime,” stated Acting Special Agent in Charge Kelly Lewis.
“IRS-Criminal Investigation will continue to seek justice on behalf of Michiganders across the state
against those who defraud the UIA and Michigan workforce."

“Brandi Hawkins while employed as a contractor used her position to take advantage of the public and
defraud the State of Michigan. She was able to manipulated the Michigan Unemployment Insurance
Agency system for her and others’ personal gain. We will continue to work with our law enforcement
partners throughout Michigan to bring criminals like Hawkins to justice,” said Douglas J. Zloto, Special
Agent in Charge, U.S. Secret Service, Detroit Field Office.

“Brandi Hawkins abused her position as an Unemployment Insurance Examiner for the State of Michigan
Unemployment Insurance Agency to release payment on $3.8 million in fraudulently filed
unemployment insurance claims in exchange for bribes. Hawkins approved claims that, if disbursed in
full, would have resulted in the fraudulent payout of over $12 million earmarked for Pandemic
Unemployment Assistance. We will continue to work with our law enforcement partners to protect the
integrity of unemployment insurance benefit programs," stated Irene Lindow, Special Agent-in-Charge,
Chicago Region, U.S. Department of Labor Office of Inspector General.

"Brandi Hawkins used her position to approve fraudulent unemployment claims and divert money
desperately needed by those who lost jobs as a result of the pandemic," said Timothy Waters, Special
Agent in Charge of the FBI's Detroit Division. "The FBI will continue to work with our federal law
enforcement partners to protect the integrity of these vital federal assistance programs."

“U.S. Postal Inspectors are federal law enforcement agents who conduct investigations of postal-related
crime, including any fraud in which the postal system is used, in an effort to ensure America’s
confidence in the U.S. Mail. Investigating violations of more than 200 federal laws, the Postal Inspection
Service seeks to leverage relationships with our law enforcement partners and enforce these statutes to
the maximum extent possible against those aiming to utilize the U.S. Mail in furtherance of illicit
activities and criminal schemes. I commend the partnership, hard work, and countless hours put forth by
all agencies involved in bringing this investigation to a successful resolution,” said Juan Vargas, Acting
Postal Inspector in Charge of the Detroit Division

“People who willfully commit unemployment insurance fraud should know that the State of Michigan
and the Unemployment Insurance Agency are serious about identifying and holding them accountable
for their actions,” said Liza Estlund Olson, acting director of the Unemployment Insurance Agency.
“Through the great work of our federal and state partners along with UIA investigators, we’re are
working to root out fraudulent schemes like this one and protect unemployment benefits for those who
are legitimately entitled to them.”

The case is being prosecuted by Assistant United States Attorney Timothy Wyse. The investigation was
conducted jointly by the Department of Labor, Office of Inspector General, United States Secret Service,
Internal Revenue Service - Criminal Investigation, Federal Bureau of Investigation, the U.S. Postal
Inspection Service and the Unemployment Insurance Agency, Michigan Department of Labor and
Economic Opportunity


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