LITTLE ROCK, Ark. – Federal prosecutors have indicted 10 Arkansans tied to a fraud conspiracy involving theft of pandemic unemployment funds costing taxpayers nearly $3 million.
According to a release from the United States Attorney’s office, the indictments allege that the defendants used unemployment debit cards, designed to distribute pandemic unemployment assistance made available by the federal CARES Act to illegally withdraw funds.
Prosecutors claim that one of the defendants, 24-year-old Madison Clark of Alexander, was working as a contract employee at a bank distributing debit cards for California’s Employment Development Department.
Using the access from that job, prosecutors said Clark issued cards, removed fraud blocks and added credits to unemployment debit card accounts. Investigators say that so far they believe this led to $2/7 million in fraudulent losses.
The U.S. Attorney said that another defendant, 27-year-old Khi Simms, then recruited others to use the debit cards to withdraw the fraudulently gathered funds.
The defendants are all being charged with conspiracy to commit bank fraud and with wire fraud. The first charge brings penalties including up to 30 years in prison and a $1 million fine, and the second charge could lead to 20 years in prison and a fine of up to $250,000.
Simms was ordered to remain in custody on Tuesday afternoon after a detention hearing was held, and three other defendants, 27-year-old Brelyn London, 26-year-old Karl Harris and 26-year-old Deuntae Diggs, all from Little Rock, are also in custody awaiting trial.
The six remaining defendants – Clark, 23-year-old Keshoun Coleman, 19-year-old Derrick Harris, 27-year-old Terence Holeman, 29-year-old Brandon Shavers, 27-year-old Quentin Watson – were released on bond and are awaiting trial, scheduled for April 18.
The case is being investigated by the FBI and prosecuted by Assistant United States Attorney Allison W. Bragg.