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Directorate for Management

  • Virginia Woman Pleads Guilty to Fraudulently Obtaining COVID-Related Unemployment Benefits for Prison Inmates

    For Information Contact

    Public Affairs (202) 254-4100

    For Immediate Release

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    RICHMOND, Va. – A Glen Allen woman pleaded guilty today to mail fraud for her role in a conspiracy to fraudulently obtain pandemic-related unemployment benefits for 22 prison inmates, which she shared with the inmate beneficiaries.

    “These critical unemployment funds were intended for deserving members of our communities to help alleviate their economic hardship during the pandemic,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “This prosecution and the defendant’s guilty plea send a clear message that EDVA will bring to justice those who unlawfully exploit taxpayer-funded assistance for personal gain.”

    According to court documents, Virginia Smith, 37, conspired with an inmate at Baskerville Correctional Center to collect the personally identifiable information of inmates to fraudulently apply for Virginia unemployment benefits from around June 2020 to January 2021, during the COVID-19 pandemic. Smith, with the assistance of the inmate co-conspirator, submitted successful applications for Virginia unemployment benefits for at least 22 inmates at Baskerville Correctional Center, resulting in the dispersal of at least $223,984.72 in fraudulent benefits.

    “Smith and her co-conspirators used the identities of prisoners housed at the Baskerville Correctional Center to file fraudulent unemployment claims and unlawfully collect more than $223,000 in resulting benefit payments,” said Derek Pickle, Special Agent-in-Charge, Washington Region, U.S. Department of Labor Office of Inspector General. “As the primary law enforcement agency responsible for investigating unemployment insurance fraud, the Department of Labor Office of Inspector General is committed to supporting the prosecution of individuals who take advantage of unemployment insurance programs. We are grateful to the U.S. Attorney’s Office, the Virginia Employment Commission, and our law enforcement partners for their invaluable support of our mission.”

    “Intentional abuse of COVID-19 unemployment benefits for personal gain is appalling,” said Joseph V. Cuffari, Inspector General for the Department of Homeland Security. “Today’s sentencing illustrates that DHS OIG and our law enforcement partners will work tirelessly to dismantle these greed-driven schemes.”

    As part of their scheme, Smith’s co-conspirator would provide her with the names, dates of birth, and Social Security numbers of inmates serving a sentence at Baskerville Correctional Center. Smith would then file unemployment claims with the Virginia Employment Commission using that information. Once the applications were approved, Smith would share the proceeds of the crime with the inmates whose personal information she used to file the fraudulent claims, keeping a portion of the proceeds for herself. The applications contained several false statements such as a false physical address, rather than the address of the correctional facility at which the inmates were actually living; a false last employer; and a false certification that the inmates were ready, willing, and able to work in the event employment became available.

    Smith is scheduled to be sentenced on September 9. She faces a maximum penalty of 30 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

    Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Derek Pickle, Special Agent-in-Charge of the Washington, DC Regional Office, U.S. Department of Labor, Office of Inspector General; Joseph V. Cuffari, Inspector General for the Department of Homeland Security; Jerald W. Page, Special Agent in Charge of the U.S. Secret Service’s Richmond Field Office; and Eric D. English, Chief Henrico County Police Division, made the announcement after U.S. District Judge John A. Gibney, Jr. accepted the plea.

    This investigation was conducted under the auspices of “Operation Checkmate,” the Virginia Department of Corrections Inmate Unemployment Insurance Fraud Task Force. The task force is led by the U.S. Attorney’s Office for the Eastern District of Virginia, DOL-OIG, DHS-OIG, and the Virginia Department of Corrections. This investigation included significant assistance from the Virginia Employment Commission.

    Assistant U.S. Attorney Kashan Pathan is prosecuting the case.

    A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:21-cr-60.

    DHS Agency
  • Former CEO Sentenced for Defrauding Multiple Federal Agencies

    For Information Contact

    Public Affairs (202) 254-4100

    For Immediate Release

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    ALEXANDRIA, Va. – An Arlington businessman was sentenced today to 21 months in prison with three years of supervised release for making false statements to multiple federal agencies in order to fraudulently obtain multimillion-dollar government contracts, COVID-19 emergency relief loans, and undeserved military service benefits.

    “In the early stages of the global pandemic, the defendant engaged in three egregious fraudulent schemes that he brazenly concocted to enrich himself,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “He falsely represented to the federal government that he could provide $38 million in life-saving N95 masks, and simultaneously, he fraudulently obtained over $1 million in pandemic assistance intended for deserving families and businesses. The defendant also continued an offensive seven-year scheme to obtain unearned veterans benefits by falsely claiming to have served as a Marine. This case underscores our commitment to holding accountable those who exploit essential government programs at the expense of veterans, front-line medical personnel, and vulnerable members of our communities.”

    According to court documents, Robert S. Stewart, Jr., 35, was the owner and president of Federal Government Experts (FGE) LLC, an Arlington-based company that purported to provide various services to the U.S. government. In this capacity, between April 1, 2020 and May 14, 2020, Stewart made false statements to the Federal Emergency Management Agency (FEMA) and the Department of Veterans Affairs (VA) in order to obtain lucrative contracts to provide COVID-19 personal protective equipment (PPE). In addition, Stewart fraudulently obtained loans under the federal Paycheck Protection Program and the Economic Injury Disaster Loan Program. He also defrauded the VA by falsely claiming to be entitled to veteran’s benefits for serving in the U.S. Marine Corps when, in fact, he never served in the Marines.

    As part of his PPE scheme, Stewart falsely stated to procurement officials from FEMA and the VA that he was in possession of large quantities of PPE, including N95 masks. Based on Stewart’s false statements, the VA and FEMA awarded FGE contracts valued at $35,000,000 and $3,510,000, respectively. The VA intended to use the PPE purchased from FGE to protect employees and patients at various Veterans Health Administration facilities, which serve the medical needs of over nine million veterans each year. FGE failed to supply any PPE to the VA and FEMA. The U.S. government suffered no financial loss because the contract called for payment upon delivery and inspection of the goods.

    “These were crimes against the American people. Stewart fraudulently pursued contracts that were needed to supply VA hospital patients and staff with critical personal protective equipment during the COVID-19 pandemic, and stole taxpayer dollars intended to help local businesses stay afloat during the pandemic. In addition, he lied about his service in the military and received veterans benefits for which he was not entitled,” said VA Inspector General Michael J. Missal. “This sentence should send a clear message that the VA Office of Inspector General will work diligently with its law enforcement partners to ensure those who would defraud the nation’s veterans and the public will be caught and prosecuted.”

    “We continue to collaborate with our law enforcement partners to pursue and dismantle schemes aimed at exploiting critical COVID-19 resources, and we are grateful for today’s sentencing decision, which sends a strong message to help deter potential fraudsters,” said Joseph V. Cuffari, Inspector General for the Department of Homeland Security (DHS).

    “Today’s sentencing shows that we will not allow criminals to get away with exploiting government relief efforts that were designed to assist millions of Americans during the COVID-19 pandemic. Stewart fraudulently obtained government-backed loans, and his nefarious and unethical actions were for his own personal gain,” said Robert E. Bornstein, Acting Special Agent in Charge of FBI’s Washington Field Office Criminal Division. “The FBI and our partners are committed to protecting the American people and the integrity of government assistance programs and will work to identify, arrest, and prosecute those who choose criminal activity and greed over principle and the law.”

    Stewart also applied for various loans on behalf of FGE under the federal Paycheck Protection Program and the Economic Injury Disaster Loan Program. These programs were designed to provide emergency financial assistance to the millions of people suffering the economic effects of the COVID-19 pandemic. The loan applications submitted by Stewart falsely overstated the number of FGE employees and the amount of FGE’s payroll, two factors that were important in determining loan eligibility and the proper amount of the loan. In addition, Stewart used some of the loan proceeds for personal expenditures rather than to pay employees or for other appropriate business expenses. As a result of these fraudulent loan applications, Stewart obtained approximately $1,066,000 in government-backed loans during the pandemic.

    In a separate fraudulent scheme, Stewart, an Air Force veteran, submitted an application for benefits to the VA. The application was fraudulent in that Stewart falsely claimed that he also served in the U.S. Marine Corps. Stewart created fraudulent documents that stated he attained the rank of Corporal in the Marine Corps and was honorably discharged after receiving several awards and commendations, including the Rifle Expert Badge, Pistol Expert Badge, Meritorious Mast, National Defense Service Medal, Sea Service Deployment Ribbon, Southwest Asia Service Medal, Certificate of Appreciation, and the Kuwaiti Liberation Medal. Stewart, in fact, never served in the Marines. Based on his fraudulent application, he received excess benefits in the amount of $73,722.45 between September 2013 and October 2020.

    Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Robert E. Bornstein, Acting Special Agent in Charge of FBI Washington Field Office Criminal Division; Joseph V. Cuffari, Inspector General for the Department of Homeland Security (DHS); and Michael J. Missal, Inspector General for the U.S. Department of Veterans Affairs, made the announcement after sentencing by U.S. District Judge Rossie D. Alston, Jr.

    Assistant U.S. Attorney William Fitzpatrick prosecuted the case.

    A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:21-cr-5.

    DHS Agency
  • DHS OIG Participates in the 2nd Annual National “Slam the Scam” Day

    For Information Contact

    Public Affairs (202) 981-6000

    For Immediate Release

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    The U.S. Department of Homeland Security (DHS) Office of Inspector General (OIG) joins the Social Security Administration (SSA) OIG and other Federal agencies on March 4, 2021 for the 2nd Annual National “Slam the Scam” Day, to raise public awareness of government imposter telephone scams across the United States.

    DHS OIG joins SSA OIG in warning all Americans to hang up on all government imposters, and asking them to spread the word to family and friends.  These pervasive scams—in which callers pretend to be government employees to mislead victims into providing personal information or making payments—have become a scourge on the American public.  

    Most recently, scammers, posing as DHS officials, have used Facebook and Instagram accounts in an attempt to swindle money through Cash App and gift cards.  The scammers may use one of the following forms of contact:
    •    Sending a direct message to a victim through Facebook or Instagram to solicit money;
    •    Posting on a victim’s Facebook timeline to advertise Federal Emergency Management Agency (FEMA) assistance, which includes contact information or a link; or
    •    Creating “highlights” on an Instagram account homepage, which advertise ways to make money.

    In a direct message, the perpetrator indicates that if the victim sends money through Cash App, the victim will receive a substantial dividend in return, e.g., $10 for $1500, $200 for $5500, or $650 for $7000.  Variations of the Facebook posts include offering COVID-19 relief assistance via Cash App by paying a grant-processing fee, requesting comments on a Facebook page and then directing the victim to purchase gifts cards to receive a dividend paid by FEMA, and soliciting contributions to fraudulent organizations such as “FEMA World Health.”  The Instagram “highlights” connect to sites advertising FEMA assistance and provide instructions on how to send money to receive money in return.

    DHS OIG reminds you this “Slam the Scam” Day that if you are contacted through social media, do not provide any personal information.  DHS and FEMA will never contact you using Facebook or Instagram.  FEMA does not request grant-processing fees for benefits and will not request that you contribute to causes or charities using gifts cards or CashApp payments.  FEMA does not issue dividends.  We encourage the public to report these scams to Facebook and Instagram.  

    DHS OIG takes these matters very seriously.  Anyone who believes they may have been a victim of this scam is urged to call the DHS OIG Hotline (1-800-323-8603) or file a complaint online via the DHS OIG website www.oig.dhs.gov/hotline.  By retaining information such as the CashApp account, the Facebook profile, Instagram handle, or email address you were contacted on, you may be able to provide valuable information that could assist DHS OIG to investigate the scam.  

    For more information regarding SSA OIG’s National “Slam the Scam” day activity you can visit SSA OIG. 

    DHS Agency