Feds: State worker helped steal $1M in pandemic aid

Robert Snell
The Detroit News

Detroit — A state of Michigan employee teamed with his barber's wife to steal more than $1 million in unemployment money meant to help people endure the COVID-19 pandemic, federal prosecutors said Tuesday.

Jermaine Rose, 41, of Detroit, a lead claims examiner with the state Unemployment Insurance Agency, was charged in a mail and wire fraud and theft of government funds case unsealed in federal court in Detroit.

Exterior photo of the Michigan State Capitol in Lansing, Wednesday, July 15, 2020.

He is the second state employee charged in recent weeks and accused of concocting a scheme to steal emergency aid mean for people unemployed during the global pandemic. 

Rose was charged alongside Serenity Poynter, 36, of Detroit, who is accused of filing dozens of fraudulent unemployment claims that used different social security numbers and variations of her name. She tried to defraud the state out of $353,000 and obtained $116,000, according to the criminal complaint.

“At a time when thousands of people in Michigan are out of work because of the pandemic, the defendants are charged with stealing unemployment benefits that should have gone to Michiganders trying to feed their families," U.S. Attorney Matthew Schneider said in a statement. "Anyone who steals unemployment funds steals from the people of Michigan."

Rose has worked for the state since 2004. He was suspended July 30 pending an investigation.

“It’s disheartening that a public servant would abuse the trust of Michiganders because of their own greed, especially during a time when workers need this financial assistance the most," Jeffrey Frost, a special fraud adviser with the Michigan Department of Labor and Economic Opportunity's Unemployment Insurance Agency, said in a statement. 

The investigation involving personnel from the U.S. Department of Labor and U.S. Secret Service started in early July. Labor investigators received allegations about a scheme designed to steal millions of dollars in Pandemic Unemployment Assistance. 

The Federal Pandemic Unemployment Compensation program provided unemployed workers an extra $600 per week earlier this year. Under a President Donald Trump executive order, a second pandemic program provides an additional 13 weeks of benefits of about $300.

The investigation soon focused on Rose, who was working from home in Detroit during the pandemic, according to an affidavit written by Shanika Sanders, a special agent with the Labor Department's Office of Inspector General.

"The investigation has shown that Jermaine Rose has used his position...to wrongfully release payment on multiple fraudulent (Unemployment Insurance) claims...including multiple claims filed by Serenity Poynter," Sanders wrote.

Rose's actions led to a loss of $1,011,000 and tried to facilitate $761,000 in additional fraudulent claims, the agent wrote.

Poynter was released on $10,000 unsecured bond Tuesday.  Her attorney did not respond to a request for comment immediately Tuesday.

A lawyer for Rose could not be reached for comment.

Rose and Powere charged one month after state contract employee Brandi Hawkins, 39, of Detroit, was charged with using "insider access" at the state unemployment agency "to fraudulently release payment on hundreds of fraudulent claims." She used some of the money to buy luxury purses and other items, prosecutors said.

Hawkins's actions resulted in the fraudulent disbursement of more than $2 million in federal and state funds "intended for unemployment assistance during the pandemic," according to the government.

The supplemental aid is designed to lessen the pain of the COVID-19 pandemic.

July's seasonally adjusted unemployment rate was 8.7%, according to the Michigan Department of Technology, Management & Budget.

The figure is 6.2 percentage points below June's rate and above July's national average of 10.2%. A year ago, however, Michigan's unemployment rate was 4.1%.


Twitter: @robertsnellnews