Atlanta prison inmate charged with $11 million in fraud, money laundering – all while in prison

ATLANTA, GA – In a course of action similar to the millions of dollars bilked out of the state of California by federal and state inmates, a Georgia federal prison inmate and two others on the outside were indicted on Friday for conducting a “multi-million-dollar fraud scheme from the confines of his prison cell.”

A federal grand jury indicted a man serving a prison sentence in a Georgia Correctional facility and two others for conspiracy to commit bank fraud and money laundering, according to a statement from the U.S. Attorney’s Office.

The indictment alleges that Arthur Cofield, an inmate at the Georgia Diagnostic and Classification Prison in Butts County, Georgia, conducted an incredible fraud worth millions, according U.S. Attorney Byung J. “BJay” Pak.

Arthur Cofield, 29, Eldridge Bennett, 63, and Eliayah Bennett, 25, all of Atlanta, were indicted on multiple counts of conspiracy to commit bank fraud and money laundering.

According to U.S. Attorney Pak, the charges, and other information presented in court:

“Arthur Cofield is an inmate at the Georgia Diagnostic and Classification Prison in Butts County, Georgia, serving a 14-year sentence for armed robbery.

“He is also currently under indictment in Fulton County, Georgia, charged with attempted murder.”

In the indictment, unsealed December 11th, the U.S. Attorney’s Office alleges:

“In June 2020, using a contraband cell phone, Cofield obtained multiple means of identification for victim S.K., and gained access to an online account owned by S.K., and managed by Charles Schwab.

On June 5, 2020, Cofield impersonated S.K., and called a Charles Schwab customer service representative to inquire about opening a checking account.

“The customer service representative informed Cofield that a form of identification and utility bill would be required to complete the verification process.

“At Cofield’s request, a co-conspirator texted Cofield with a picture of S.K.’s driver’s license and a Los Angeles, California, Department of Water and Power utility bill.

“On June 8, 2020, Cofield submitted via email a purchase inquiry to Money Metals Exchange, LLC, a precious metals dealer based in Idaho, for the purchase of gold coins.

“Purporting to be S.K., while communicating with representatives of Money Metals Exchange, LLC, Cofield agreed to purchase 6,106 American Gold Eagle one-ounce coins for the price of $10,998,859.92.

“That same day, a female co-conspirator claiming to be calling on behalf of her husband contacted a Charles Schwab customer service representative and inquired about the verification procedures to initiate a wire transfer.

Later, Cofield impersonated S.K., and called a Charles Schwab customer service representative to inquire about sending a wire transfer in the amount of $11,000,000.

“During the call, Cofield falsely claimed to be S.K., and referenced the earlier call made by the female co-conspirator.

Based on these false representations, Charles Schwab wired $11,000,000 from the account belonging to S.K., to an account controlled by Money Metals Exchange, LLC.

On June 13, 2020, Cofield hired a private security company to transport the purchased gold coins from Boise, Idaho, to Atlanta, Georgia, by chartered private plane.

On June 16, 2020, the private security team landed at the Atlanta Signature Airport and met with co-defendant Eldridge Maurice Bennett. Bennett presented a false identification document to the private security team and took possession of the gold coins.

In July 2020, Cofield contacted the landowner of a six-bedroom residence located near West Paces Ferry, in Atlanta, Georgia, and offered to buy the property for $4.4 million.

The landowner eventually received approximately $720,000 in cash as down payment from Eldridge Bennett and a woman Cofield described as his wife, Eliayah Bennett. At the closing on September 1, 2020, Eldridge Bennet conveyed the remaining $3.7 million in cash to the landowner.”

Remarking on the case, U.S. Attorney Byung J. “BJay” Pak stated:

“Some prisoners aren’t interested in rehabilitation or paying their debt to society.  The allure of millions of dollars in gold, coupled with contraband prison cellphones, allegedly was enough for Cofield to commit a brazen million-dollar fraud scheme from the confines of his prison cell.”

Tommy D. Coke, Inspector in Charge of the Atlanta Division, US Postal Service, commented:

“This elaborate fraud scheme is truly shocking in its scope and nature.  The U.S. Postal Inspection Service is committed to ensuring the U.S. Mail is not utilized as a tool in this type of fraud and to holding the responsible parties fully accountable for their actions.”

United States Secret Service Special Agent in Charge of the Secret Service’s Atlanta Field Office Steven R. Baisel, who was involved in the investigation, stated:

 “The Secret Service worked closely with our partners and shared information and resources to ultimately bring this criminal to justice.  Today’s indictment proves that there is no such thing as anonymity for those engaging in fraudulent schemes.”

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Large-scale unemployment fraud by inmates (including Scott Peterson) bilks California taxpayers out of nearly $1 billion

November 25, 2020

SACRAMENTO, CA – Welcome to California.

A task force led by district attorneys from several California counties announced Tuesday, November 24, that fraudulent COVID unemployment claims filed in the name of jail and prison inmates has resulted in massive unemployment claims and payouts amounting to hundreds of millions of dollars.

In a letter to California Governor Gavin Newsom, prosecutors from the task force described the scam as “what appears to be the most significant fraud on taxpayer funds in California history.”

According to Sacramento County District Attorney Anne Marie Schubert, COVID unemployment fraud is rampant in every type of incarceration facility, including jails, prisons, and federal institutions in California. 

Schubert stated that from March 2020 through August 2020, 35,000 claims were filed in the name of California state prison inmates alone.  20,000 of those claims have been paid, which totals approximately $140 million.  The payments are typically made in the form of prepaid debit cards.

That amount does not include additional widespread fraud by inmates, who have not always filed under their own names.  Some have successfully filed under false names such as John Doe, John Adams, or even “Poopy Pants.”

Such success is embarrassing, said Fresno Assemblyman Jim Patterson, who told KTVU:

“We’re going to be the laughingstock of the United States, that we’re sending, potentially, a billion dollars to criminals with names like “John Doe” and “Poopy Pants.”

Some claims are not sent directly to the incarcerated.  Some are sent to addresses outside the facility, and co-conspirators have then sent funds back to the inmate in the form debit cards or money orders.

The beneficiaries of this scam also include 133 death row inmates.  One unnamed death row inmate received $19,676 directly in his or her name.  In August 2020 alone, death row inmates received $420,000 in the form of prepaid debit cards.

The highest amount paid to an individual inmate was about $49,000, and one inmate was found to have filed 16 claims.

Some recipients are those who have already committed horrors, and they shockingly continue to commit crimes against California taxpayers from behind bars.

According to the New York Times, examples include:

“Cary Stayner, a serial killer who murdered four women near Yosemite National Park in 1999; 

Wayne Ford, another serial killer, who confessed to at least four murders in 1997 and 1998 in Northern California;

Scott Peterson, convicted in 2004 of the murder of his pregnant wife, Laci;

And Isauro Aguirre, who, with his girlfriend, tortured and murdered her 8-year-old son, Gabriel Fernandez, in 2013 in Palmdale, Calif.”

One prime example of how relatively easy it can be California to game the EDD system is the case of rapper Fontrell Antonio Baines, whose stage name is “Nuke Bizzle.”

Baines, a resident of Los Angeles, managed to obtain over $1.2 million in unemployment benefits by having 92 pre-loaded debit cards sent to various local addresses under different names.

Baines premiered a video in September called “EDD,” in which he and another rapper bragged about getting rich through the EDD, or California’s Employment Development Department.

Authorities caught up to Baines in Las Vegas, where the rapper was holding eight debit cards.  Only one of the cards was in his name.

Officials learned much about how EDD fraud has been perpetrated in the California jail and prison system when they made a large bust of a fraud ring in San Mateo County.

At the San Mateo Jail, 30 inmates had friends and relatives on the outside file fraudulent unemployment claims on their behalf.  Cards loaded with up to $20,000 were mailed to the co-conspirators, who then withdrew a cut of 3 to 4 thousand dollars, and then delivered the debit card to the inmate.

San Mateo deputy District Attorney Sean Riordan described the scheme as “kind of a big spider web,” as the scam extended beyond the San Mateo Jail and into Corcoran State Prison, the San Francisco County Jail, and the California State Prison in Sacramento.

So far in the San Mateo case, 21 people, consisting of 13 prisoners and 8 accomplices, have been charged.  Ironically, one of these criminals is at large, having paid at least part of his $1 million bail with money obtained through EDD fraud.

However, that leaves large amounts of money and vast numbers of prisoners still perpetrating fraud.  The prosecutor task force has placed blame for the success of this widespread fraud at the feet of the California’s EDD.

According to KTVU, District Attorney Anne Marie Schubert and her fellow prosecutors on the task force “denounc[ed]” the EDD for not checking inmate lists against claimants.  Such a process is part of the routine in 35 states.

In addition, Schubert castigated the EDD for not checking where the funds were directed, since many payouts were sent directly to prisons and jails.  She also criticized the EDD for not addressing clearly fake names such as “John Doe” or “Poopy Britches.”

San Mateo County District Attorney Steve Wagstaff told KTVU that the EDD claimed it was unable to stop the flow of funds unless charges were filed against claimants.

He said:

“What we were told is that, under the regulations that they were all bound by, the EDD, they could not cut the people off until we filed the charges.”

For their part, the EDD told KTVU that they are now trying to compare suspicious claims with inmate names.

The EDD added:

“We’re also pursuing how to integrate cross-matches moving forward as part of enhanced prevention efforts during this unprecedented time of pandemic-related unemployment across the country.”

Meanwhile, those who are actually eligible for the unemployment benefits are being hurt in two additional ways.

First, according to El Dorado County D.A. Vern Pearson, legitimate claimants are having trouble getting through to EDD because they do not know how to walk through the process like the inmate fraud rings do.

Pearson told KTVU:

“They are unable to get money because they don’t know the system the same way the inmates do.”

Second, at least 350,000 EDD card recipients have found that EDD has frozen their cards in an attempt to investigate and stop fraud.  Unfortunately, this means that some legitimate claimants have been prevented from accessing their benefits.  Furthermore, this is an unexpected maneuver, considering that the EDD claimed it could not do anything about fraud until charges were filed.

In recent weeks, the EDD’s examination of the backlog of nearly 1.6 million claims has not borne much fruit in identifying and stopping fraud.  Sadly for non-criminals, according to Politico, the majority of beneficiaries flagged for possible discrepancies were, in fact, legitimate.  Fraudulent claims, on the other hand, “sailed through the automated system.”

The task force of California prosecutors has asked California Governor Gavin Newsom for “significant resources” to combat the widespread fraud.

Newsom issued a statement in response to that request on Tuesday, November 24.

Calling the unemployment fraud in jails and prisons “absolutely unacceptable,” Newsom added that he had already called on the EDD to review fraud, but acknowledged “we need to do more.”

He continued:

“To expedite and strengthen these efforts I have directed the Office of Emergency Services to stand up a task force to coordinate state efforts and support investigations by local District Attorneys. 

“We will continue to fully partner with law enforcement and direct as many resources as needed to investigate and resolve this issue speedily.”

Effective action is certainly urgently needed to avoid further stealing from taxpayers and diversion of resources from legitimate claimants.

As District Attorney Schubert said:

“We are paying hundreds of millions of dollars in the name of serial killers, rapists and child molesters. We need to turn the spigot off.”

_

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Author: James E. Lewis

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