Louisiana AG Announces Arrests in Alleged $1M COVID Unemployment Fraud

Jeff Landry
Louisiana Attorney General Jeff Landry speaks to reporters in Washington, D.C., in 2019. (AP Photo/Manuel Balce Ceneta)

BATON ROUGE – Louisiana Attorney General Jeff Landry has announced six new arrests relating to the state’s COVID-19 unemployment assistance program, a system that has helped hundreds of thousands of displaced workers while being plagued with abuse.

Landry said the program’s latest alleged fraud totaled more than $1 million.

“I want to thank all of our law enforcement and agency partners who helped in our efforts,” he said. “I encourage anyone who knows of fraudulent activity related to COVID-19 unemployment benefits to report it.”

The scheme involved multiple groups across several parishes and a coordinated effort to defraud both the Louisiana and California COVID-19 unemployment programs. Members of these groups filed multiple online claims with the Louisiana Workforce Commission and the California Employment Development Department, according to the Louisiana Bureau of Investigation.

The tie to California is notable. A special prosecutor was hired last week to investigate $19 billion in suspicious claims that ran through the state’s Employment Development Department, including processed claims for international criminal organizations and $400 million in paid benefits to 21,000 prison inmates. Nine inmates alone received $160,000 over a three month period last year.

Louisiana has had its own troubles since the public health emergency began, Landry said.

Upon announcing six arrests for illegal transmission of monetary funds, criminal conspiracy, money laundering and government benefits fraud, Landry cited $400 million in unemployment disbursements to individuals who did not qualify, as well as $6.2 million in benefits for prisoners and $1 million in paid claims to dead people.

The recent law enforcement operation involved the Ascension Parish Sheriff’s Office, East Baton Rouge Parish Sheriff’s Office, Iberville Parish Sheriff’s Office, West Baton Rouge Parish Sheriff’s Office, Addis Police Department, Louisiana Workforce Commission and U.S. Department of Labor.

“Crime has no geographical boundaries and because of our partnerships with other law enforcement agencies, neither do we,” said Sheriff Brett Stassi. “These partnerships are a crucial part in curbing crime and corruption in our communities.”

Two outstanding warrants remain in the matter.

Louisiana garnered $1.8 million in federal anti-fraud funds in February, as part of a $49 million grant spread across 28 states.

The Louisiana Workforce Commission paid $550 million in unemployment benefits in the first 43 days of 2021, while promoting 77,000 available jobs.

“The Louisiana Workforce Commission continues to pay unemployment insurance in record numbers to those in need. Simultaneously, we must comply with all federal mandates, as state agencies will be held accountable,” LWC Secretary Ava Dejoie said. “We also want our fellow Louisianans to know that thousands of jobs are available and LWC is here to help you in your pursuit for employment.”

The state’s latest four-week average of unemployment claims shows 49,103 residents continue to collect benefits, though federal aid is scheduled to end July 31.

The Louisiana Legislature and Gov. John Bel Edwards agreed to end federal unemployment funding for a compromise increase in state unemployment assistance. The agreement was solidified when Edwards signed House Bill 183 last month.

By William Patrick of the Center Square

Categories: COVID-19, Legal, Today’s Business News