Feds: Michigan unemployment contractor part of $2 million fraud scheme

Craig Mauger
The Detroit News

Lansing — A contract employee of Michigan's Unemployment Insurance Agency has been charged after allegedly taking part in a multimillion-dollar fraud scheme during the COVID-19 pandemic, U.S. Attorney Matthew Schneider says.

Amid record jobless filings in Michigan, Brandi Hawkins, 39, of Detroit allegedly used her "insider access" at the agency "to fraudulently release payment on hundreds of fraudulent claims," according an announcement from the U.S. Department of Justice.

She then used the "proceeds" of her crime to purchase high-end handbags and luxury goods, the announcement added.

Michigan's unemployment website has seen unprecedented filings in recent weeks as the COVID-19 pandemic has shuttered the state's economy.

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," the release said.

"Brandi Hawkins is charged with exploiting the current pandemic to defraud the state of Michigan and United States for her own personal gain," Schneider said in a news release. "These are serious allegations, and my office is committed to prosecuting any person who attempts to use the Covid-19 crisis to defraud the people of Michigan."

According to a criminal complaint filed in U.S. District Court for the Eastern District of Michigan, Hawkins worked with outside actors who entered numerous false claims into the state's unemployment system. Hawkins released payment on the claims, leading to the fraudulent disbursement of more than $2 million, the complaint says.

Authorities seized more than $200,000 in cash from her residence, according to the Department of Justice.

Hawkins was assigned to work as an unemployment insurance examine in April. She was terminated June 17, according to the complaint.

But the complaint says the state's fraud investigation unit reviewed the audit logs for Hawkins's user account and determined that she continued to remotely access state systems after "her termination and was actively 'discarding' fraud-stops and releasing payment on hundreds of fraudulent claims until early July 2020."

Among the items authorities seized from her residence was "the Microsoft Surface tablet provided to her by her employer," the complaint says.

She violated federal laws on theft and wire fraud, according to the criminal complaint. A trial cannot be held on felony charges in a complaint.  When the investigation is completed, a determination will be made whether to seek a felony indictment, according to the Department of Justice.

Jeffrey Frost, special fraud adviser at the Unemployment Insurance Agency, said the agency appreciates Schneider's "quick action to bring this case to justice."

"The Unemployment Insurance Agency will continue to work closely with our state and federal partners to identify unemployment fraud that can be quickly turned over to law enforcement for prosecution," Frost added.