Leader in Nevada jobless benefits scam sentenced to prison

By Jeff German
LAS VEGAS REVIEW-JOURNAL
Posted: Feb. 3, 2012 | 11:48 a.m.
Updated: Feb. 3, 2012 | 1:03 p.m.

Francisco Garcia, the leader of a sweeping scheme to steal $4.4 million in state and federal unemployment benefits, was sentenced Friday to 37 months in federal prison.

U.S. District Judge James Mahan also ordered Garcia to share with three other defendants in the restitution of the $4.4 million the taxpayers lost in the scam.

Garcia, 41, who Mahan called the "most culpable," was the last of the four defendants sentenced by the judge this week. Federal prosecutors believe all four defendants are related.

Earlier in the week, Efrain Garcia, 41, and Nabor Garcia, 32, were sentenced to two years in prison. Eloy Garcia, 33, who cooperated in the joint federal investigation, received a 15-month prison sentence.

At Efrain Garcia's sentencing Mahan said, "every citizen in Nevada" was victimized in the "massive" scheme.

Illegal immigrants were recruited to apply for phony unemployment benefits in the scheme, which took place from November 2007 to September 2009, federal prosecutors have alleged.

Francisco Garcia, who is in custody, pleaded guilty in October to one count each of money laundering, conspiracy to commit mail fraud and false representation of a social security number.

On Friday, with his family in court, Garcia apologized to Mahan and asked for leniency.
Assistant U.S. Attorney Nicholas Dickinson argued for the 37-month sentence, saying Garcia played the biggest role in the scheme and was directly responsible for the theft of $3.6 million in taxpayer dollars.

Earlier in the week, Dickinson said in court that the scheme was a "perfect storm" at a time when Nevada's unemployment rate was reaching record highs.

Steve Zuelke, who runs the fraud unit for the Nevada Employment Security Division, told Mahan this week that the four defendants disrupted the entire unemployment benefits program.

He said the scheme delayed payments to people who "desperately" needed help in the sagging economy.

The Employment Security Division was among several agencies, including IRS Criminal Investigation and the U.S. Department of Labor's inspector general, that participated in the investigation, which involved the use of undercover agents.

In handing down Garcia's sentence on Friday, Mahan praised the work of the federal agencies that uncovered the scheme, saying they did an "excellent job of running this down."

Nevada U.S. Attorney Daniel Bogden issued a statement afterward pointing out the significance of the case.

"The extent of this fraud was staggering considering that the defendants obtained over $4 million illegally in amounts less than $1,000," Bogden said. "My thanks to our law enforcement team for putting a stop to this fraudulent activity."

Abel Salinas, who heads the labor department's inspector general's office in Los Angeles, added:
"This week's sentencings send a powerful message that combating unemployment insurance fraud remains a priority for the OIG. We will continue to work with our law enforcement partners to aggressively investigate those who violate the law by obtaining benefits to which they are not entitled."

The Las Vegas defendants submitted at least 591 fraudulent unemployment claims, causing the state to pay the $4.4 million in state and federal benefits, prosecutors alleged.

The illegal immigrants were recruited to apply for the unemployment benefits knowing they were not entitled to the benefits because they were illegally in the United States.

The state unknowingly mailed the benefits to addresses controlled by the defendants.


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