Massive ID theft scheme defrauds state of more than $250,000

Michigan Attorney General Bill Schuette announced his Public Integrity Unit has filed 41 criminal charges against three Detroit residents accused of running a sophisticated criminal enterprise that defrauded the State of more than $250,000. Schuette was joined at the announcement by Steve Arwood, Director of the Michigan Unemployment Insurance Agency.

''Criminals who defraud the State unemployment fund threaten the safety net for our jobless friends and neighbors who truly need assistance,'' said Schuette. ''We are building a new Michigan that zeros in on waste, fraud, and abuse and eliminates it from taxpayer-funded programs.''

'' The Unemployment Insurance Agency thanks the Michigan Attorney General and his team for helping us stop UI fraud,'' said Steve Arwood, Director of the Unemployment Insurance Agency. ''We will continue our joint efforts to find, fight, and prevent UI fraud.''

''Not only is this crime truly troubling because it takes trust fund dollars away from the deserving workers who need them most, but in Michigan's 100 percent employer-paid unemployment system, funds taken fraudulently are funds that can't be used by employers to invest in growing businesses or creating jobs,'' said Chuck Hadden, President and CEO of the Michigan Manufacturers Association. ''We commend Attorney General Schuette for taking strong action to combat crimes that critically impact Michigan businesses and citizens.''

''Individuals defrauding the UI system are not only stealing from the hardworking job providers who completely fund the system, but they are also threatening the availability of benefits for those truly in need,'' said Jim Holcomb, Senior Vice President of the Michigan Chamber of Commerce. ''We appreciate the Attorney General's strong efforts to send a clear message that UI fraud will be prosecuted to the fullest extent of the law.''

Jamaal Cann, 28, of Shelby Township, Kellee Norfleet-Cann, 26, of Shelby Township, and Darnell Bailey, 27, of Dearborn, are accused of coordinating an identity theft scheme to systematically defraud several agencies with the State of Michigan between February 2009 and April 2011. Attorney General investigators uncovered the alleged complex fraud after investigating a referral from the Michigan Unemployment Insurance Agency (UIA) Fraud Division in April 2011.

Schuette alleges Jamal Cann and his wife Kelly Norfleet-Cann, with the assistance of co-conspirator Darnell Bailey, orchestrated an identity theft scheme to defraud multiple state agencies of more than $250,000, including the fraudulent collection of approximately $98,000 in unemployment benefits. The defendants allegedly filed paperwork with the Michigan Unemployment Insurance Agency registering at least 19 fake companies that allegedly employed a total of 170 employees. After the companies existed on paper for at least two quarters, the defendants allegedly filed electronic claims for unemployment benefits under the names of some employees, who claimed to be laid off by the fake companies. The defendants then allegedly collected unemployment benefits by intercepting electronic debit cards issued by the UIA, at least 86 of which were mailed to abandoned homes in Southeastern Michigan listed by the defendants on UIA documents. The defendants then allegedly withdrew tens of thousands in benefit funds for their own personal use.

Investigation by the Department of Attorney General revealed that although the identities of the alleged employees were authentic, the companies and their alleged employment rolls were fictitious. Schuette alleges the criminal operation involved massive identity theft to perpetrate the frauds. Of the 170 employees allegedly registered by the defendants with UIA, 40 were associated with the Michigan Department of Corrections; at least sixteen were incarcerated, with three even serving life sentences, during the time claims were filed and benefits collected on their behalf. Other employees registered with the fake companies appear to be innocent victims of identity theft who likely had no knowledge of the criminal enterprise.

In addition to the scheme of fraudulent unemployment claims, Schuette alleges the defendants used hundreds of stolen identities to file fraudulent income tax returns with the State of Michigan. The defendants allegedly fabricated W-2 forms reflecting income from retailers Target and Wal-Mart and then filed false returns for individuals who otherwise would not file a return because they had no qualifying income. Schuette alleges the Canns collected approximately $15,000 in tax refunds deposited by the State into bank accounts controlled by the couple and may have received an additional $55,000 through other means.

Attorney General investigators also worked closely with investigators from the Michigan Department of Human Services to uncover evidence that Jamaal Cann and Kelly Norfleet-Cann allegedly collected more than $98,000 in welfare and other assistance for which they should have been otherwise ineligible. It is alleged that from 2009 through 2011, Jamaal Cann improperly received $6,513 in food stamp benefits and $11,788 in Medicaid benefits. For the same time period, it is alleged Kelly Norfleet-Cann improperly received $31,966 in childcare provider benefits, $44,818 in Medicaid benefits and $2,970 in food stamp benefits. The benefits were collected solely under their own identities. Had the couple properly reported assets and income to the Department of Human Services, they would have been ineligible to receive the level of benefits paid by the State.

Cann and Norfleet-Cann also face charges for their role in defrauding Liberty Mutual Insurance Company of over $40,000 by falsely claiming the theft of a 2004 Mercury Marauder with substantial aftermarket improvements. The couple allegedly pawned the vehicle under a fraudulent title and attempted to sell it on craigslist after receiving the insurance payment. The vehicle was recovered by the Michigan State Police.

The defendants were arrested by Attorney General investigators earlier this week.

Copyright © 2011 State of Michigan

Published: Mon, Nov 14, 2011