This defendant carried out two separate wire fraud schemes to bilk the federal government out of millions of dollars during the Covid-19 pandemic,” U.S. Attorney Talbert said. “Today’s sentence reflects the seriousness of the defendant’s conduct that has harmed the federal government along with all the individuals whose information was used in the fraudulent applications. Our office is proud to be included as a part of the California COVID-19 Fraud Enforcement Strike Force, and we remain committed to leading investigations and vigorously prosecuting those who commit COVID-19 fraud.” “Eric Jaklitsch used stolen identities to fraudulently obtain millions of taxpayer dollars meant to help unemployed workers make ends meet during the COVID-19 pandemic. As a result of prompt action by federal law enforcement, Jaklitsch’s scheme was curtailed. Today’s sentencing sends a clear message that those who defraud the unemployment insurance system will be held accountable for their actions. We remain fully committed to investigating these types of crimes with our law enforcement partners,” said Quentin Heiden, Special Agent-in-Charge, Western Region, U.S. Department of Labor Office of Inspector General. “The FBI, in collaboration with our state and federal partners, exposed and dismantled this major fraud scheme. This scheme aimed to defraud the United States Government, the State of California, and unsuspecting residents of our state. Eric Jaklitsch represents one of several individuals who sought to take advantage of vulnerable victims during the recent pandemic,” said FBI Sacramento Special Agent in Charge Sean Ragan. “Today’s sentencing of Jaklitsch United States Attorney’s Office Eastern District of California marks a significant milestone in the joint efforts of the FBI, the United States Attorney’s Office, and our partners within the COVID-19 Fraud Enforcement Strike Force.”
DHS Inspector General, Dr. Joseph V. Cuffari, stated, “Eric Jaklitsch defrauded government programs meant to help Americans at the height of the COVID-19 pandemic. DHS OIG will continue to prioritize pandemic-related fraud investigations and work with our law enforcement partners to bring perpetrators to justice.
The California EDD Case
According to court documents, between October 2020 and December 2021, Jaklitsch executed his first fraud scheme by filing at least 180 fraudulent unemployment insurance claims with California Employment Development Department (EDD), seeking Pandemic Unemployment Assistance and other benefits under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. During the scheme, Jaklitsch collected personally identifiable information (PII) of numerous individuals from the dark web — including names, birth dates, and Social Security numbers — and used their identities to file fraudulent unemployment insurance claims. Typically these unemployment insurance claims were fraudulent because the claimants were not unemployed, they were not eligible for California unemployment insurance benefits, or Jaklitsch never had authority to file claims on their behalf. Since at least October 2020, EDD has partnered with ID.me — a private company used by the EDD for ID verification of claimants — to implement a system for verifying claimant identities before EDD can process unemployment insurance claims. An internal investigation conducted by ID.me identified Jaklitsch as a person conducting a possible fraud scheme and referred the case to federal law enforcement. In executing his fraudulent scheme, Jaklitsch submitted false information to ID.me. Jaklitsch requested that the unemployment insurance benefits be mailed to various addresses under his control. EDD approved dozens of the fraudulent claims and authorized Bank of America to mail out debit cards containing unemployment insurance benefits. Jaklitsch then activated the debit cards and used them to withdraw the benefits at ATMs. The scheme sought over $7.5 million in unemployment insurance benefits and caused EDD and the United States to incur actual losses of at least $3.4 million.
The New Jersey SBA Case
For the second case, according to court documents, between July 2020 and August 2020, Jaklitsch executed a scheme to defraud the Small Business Administration (SBA) by fraudulently acquiring COVID-19 Economic Injury Disaster Loans (EIDL), which were loans meant to provide low-interest financing and grants to small businesses, renters, and homeowners in regions affected by declared disasters, like the COVID-19 pandemic.
To obtain an EIDL, a qualifying business applied to the SBA and provided certain information about its operations through an online portal. The EIDL approval process required applicants to supply minimal eligibility documentation and to affirm that the information in the application was true and correct under the penalty of perjury and applicable criminal statutes. The amount of an EIDL was based, in part, on the information provided by the applicant, including the business’s gross revenue and cost of goods sold. Qualifying entities could use EIDL funds only on certain expenses, including fixed debts, payroll, and accounts payable. Jaklitsch or one or more co-schemers knowingly submitted fraudulent EIDL loan applications to the SBA in the names of entities that did not authorize the applications. The false information included, among other things, that (a) the schemers had the authority to submit the loan applications on behalf of the applying entities, (b) the entities’ gross revenues; (c) the entities’ costs of goods sold; and (d) bank account information purportedly belonging to the entities. These fraudulent applications sought and received over $1.2 million in EIDL loan funds that were sent to at least 14 separate bank accounts. Jaklitsch used a cellphone application to withdraw over $777,000 in cash out of the $1.2 million. This case was the product of an investigation by the Federal Bureau of Investigation, the Department of Labor – Office of the Inspector General, the Department of Homeland Security – Office of the Inspector General – Covid Fraud Unit, and the California Employment Development Department (EDD) – Investigation Division. Assistant U.S. Attorney Denise N. Yasinow prosecuted the case. This effort is part of a California COVID-19 Fraud Enforcement Strike Force operation, one of three interagency COVID-19 fraud strike force teams established by the U.S. Department of Justice. The California Strike Force combines law enforcement and prosecutorial resources in the Eastern and Central Districts of California and focuses on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces use prosecutor-led and data analyst-driven teams to identify and bring to justice those who stole pandemic relief funds
Original source can be found here