Feds charge Michigan contractor in $2M unemployment fraud scheme

A Detroit woman has been charged by federal authorities with using her position as a state contractor to defraud the Michigan unemployment system. (Shutterstock image)

LANSING — Federal officials allege a contract employee for the Michigan Unemployment Insurance Agency exploited the coronavirus pandemic to authorize more than $2 million in fraudulent payments.

Authorities allege Brandi Hawkins, 39, of Detroit used "insider access" to approve hundreds of illegitimate claims beginning in April, during a historic wave of layoffs promoted by the virus and economic shutdown orders.

Authorities seized $200,000 in cash while executing a search warrant on Hawkins, according to U.S. Attorney Matthew Schneider's office. Prosecutors claim she used proceeds to purchase "high-end handbags" and other luxury goods. She’s  charged with theft or bribery from a program receiving federal funds, wire fraud and money laundering.

"These are serious allegations, and my office is committed to prosecuting any person who attempts to use the COVID-19 crisis to defraud the people of Michigan,” Schneider said.

The criminal complaint filed Friday is the first public development in a month-long investigation into suspected unemployment fraud in Michigan by both state and federal officials. Authorities say international imposter rings have targeted jobless agencies across the country in an attempt to take advantage of enhanced benefits offered during the coronavirus pandemic.

The  Michigan Unemployment Agency announced in early June it had frozen 340,000 active accounts that had already been approved for payment, delaying benefits for some legitimate claimants and requiring them to submit additional documentation to confirm their identity while officials investigated potential fraud. 

The investigation of Hawkins is ongoing, according to prosecutors, who will decide whether to seek a criminal indictment once the probe is complete. In her role as a contract employee, Hawkins duties included reviewing, processing and verifying the legitimacy of unemployment claims. 

Bridge was not able to reach Hawkins for this story.

The complaint alleges "probable cause exists" to show Hawkins knowingly and fraudulently transferred, possessed, used, and processed federal funds intended for pandemic unemployment assistance.

She "used access and authority granted by the State of Michigan to fraudulently direct these funds into multiple bank accounts via interstate wire transmissions," according to the complaint.

Federal officials allege she worked "with outside actors," currently unknown to law enforcement, who "entered numerous false claims" into Michigan's unemployment insurance system. The unemployment agency fired her on June 17.

Jeffrey Frost, a special fraud adviser appointed by the state two weeks ago, applauded Schneider's "quick action" in the case. 

"The Unemployment Insurance Agency will continue to work closely with state and federal partners to identify unemployment fraud that can be quickly turned over to law enforcement for prosecution,” Frost said in a statement.

As of July 6, the Michigan UIA said it has resolved 285,000 of the 340,000 active unemployment insurance accounts it had initially frozen during the fraud probe, along with 160,000 of the 200,000 new claims it had held up pending identification verification. 

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Comments

:William-J-Forrest:
Sat, 07/18/2020 - 5:10pm

Finally caught another CRIMINAL in the government, Im intitled to unemployment but they keep telling me the same crap she doing to other claims plz pay me what is owed to me.

CharlieD
Sat, 07/18/2020 - 5:43pm

One less Biden voter. Good riddance!

middle of the mit
Sat, 07/18/2020 - 6:55pm

Could Jonathan tell us what contract employee means.

Was she a private contractor by herself a la how construction contractors work, or did she work for a firm that contracted with the State.

Either way, this is repulsive that people are taking advantage of the position they have and stealing taxpayer money meant to help people who desperately need it.

Anonymous
Mon, 07/20/2020 - 11:02am

Taxpayers' money AND taxpayers' IDs.

Trish Sebree
Sat, 07/18/2020 - 11:38pm

So what happens to those of us that have had our accounts Frozen being accused of committing fraud which this lady was obviously the one doing and we're still out of money with no way to pay for bills or feed ourselves and nobody to reach to get help from?

Julie Hart
Sun, 07/19/2020 - 2:46am

Why is it even possible that the feds wouldn't consider charges after the investigation is finished? That doesn't make any sense

Cheryl
Sun, 07/19/2020 - 9:52am

No surprise. Seriously disabled from auto accident when auto insurance denied all benefits and MDHHS denied all benefits while lawyers committed legal malpractice leaving our family forever dead

Erlinda
Sun, 07/19/2020 - 2:12pm

Hopefully i will receive my unemployment check .

Emma
Mon, 07/20/2020 - 11:00am

How did she get the information to file the fraudulent claims? As a victim, I want to know, did she get the personal information from the dark web or through the state? Do I have to worry that my id was compromised by this singular bad actor or others as well? I feel bad for those in legitimate need of the money, but this is an ongoing nightmare for the victims.

charlie
Wed, 07/22/2020 - 9:16am

I started filing for unemployment 6-6-20. I cannot get past step 2 as it kicks me out saying my social security number is associated with another active account.. I haven't filed for unemployment in over 35+ years so how is this happening.. the Michigan governor made damn sure that her state employees got there unemployment when she layed them off.. our Michigan governor and AG is totally responsible for this unemployment fraud and should be prosecuted.. to this day I still have not received any word from unemployment, still cannot get past step 2, and have not received any unemployment benefits.. one would think it should be priority one to get people paid and not be favorite to just state workers.. Michigan governor and the AG need to get this fixed NOW.. I won't hold my breath..

Jennifer Thom
Thu, 07/23/2020 - 1:22pm

How do we find out if an account is flagged?