State contractor pleads guilty in $3M unemployment fraud scheme
A Detroit woman who worked as a contractor for Michigan's Unemployment Insurance Agency pleaded guilty Wednesday for her role in a multimillion-dollar scheme targeting government funds during the COVID-19 pandemic, federal officials said.
Brandi Hawkins, 40, pleaded before U.S. District Court Judge Paul Borman. Sentencing is scheduled for Oct. 28.
She faces a statutory maximum penalty of 20 years in federal prison, the U.S. Attorney’s Office for the Eastern District of Michigan said in a statement.
“Hawkins exploited the pandemic to defraud the State of Michigan and United States for her own personal gain,” said Acting U.S. Attorney Saima Mohsin. “Our office continues to focus on identifying and prosecuting those individuals who seek to divert funds intended for those in need during what has been a very difficult period of unemployment."
Authorities have accused Hawkins, who reviewed, processed and verified unemployment insurance claims, of working with others to enter numerous false claims between April and June 2020.
"Daily, those actors entered numerous false claims into the State of Michigan’s Unemployment Insurance Agency system, many of which were filed using stolen identities," officials said Wednesday.
Hawkins allegedly accepted bribes in return for releasing many of the claims and "used her insider access to fraudulently release payment on over (700) claims, more than ten of which involved claims filed using stolen identities," according to the release. "Hawkins' actions resulted in the fraudulent disbursement of approximately $3.8 million of federal and state funds intended for unemployment assistance during the pandemic. Had every fraudulent claim released by Hawkins been disbursed in full, the resulting loss of federal and state funds would have been over $12 million."
When a search warrant was executed at her home, authorities seized more than $200,000 in cash. Hawkins allegedly used proceeds from her actions to buy high-end handbags and other luxury goods, federal officials said.
Court records show Hawkins was terminated in June 2020 but continued to remotely access state systems. She was charged the next month.
Investigators have also linked her to a Detroit couple accused of stealing $138,000 in pandemic aid, spending it on pricey items and boasting about the deeds online.
The Unemployment Insurance Agency last year struggled to balance a huge uptick in valid pandemic unemployment claims with those filed by fraudulent actors seeking to take advantage of rules that had been loosened to get payments out faster to more people.
A review of the issue last year estimated "hundreds of millions" of dollars in fraudulent claims had been paid out. Between March and December, the UIA paid roughly $26 billion to 2.2 million claimants in Michigan.
“People who willfully commit unemployment insurance fraud should know that the State of Michigan and the Unemployment Insurance Agency are serious about identifying and holding them accountable for their actions,” said Liza Estlund Olson, acting director of the Unemployment Insurance Agency. "Through the great work of our federal and state partners along with UIA investigators, we’re are working to root out fraudulent schemes like this one and protect unemployment benefits for those who are legitimately entitled to them.”
Staff Writer Beth LeBlanc contributed.