Four Ohio Residents Indicted in $361,000 Identity Theft Scheme

Date: 
Thursday, October 24, 2013
Office Affiliation: 

Four people from Northeast Ohio were indicted for operating an identity-theft scheme which they used to defraud six states out of more than $361,000 in unemployment benefits, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

Darnell Nash, age 29, of Cleveland Heights, Kennard Berts, age 20, of Cleveland Heights, Dwayne Buchannan, Jr., age 22, of Cleveland, and Justin Davis, age 26, of Cleveland Heights, are named in the 33-count indictment. The charges include conspiracy to commit mail and wire fraud, mail fraud, wire fraud, aggravated identity theft and money laundering.

“These defendants took advantage of people looking for help, then defrauded funds that were designed to assist those out of work and facing hard times,” Dettelbach said.

The indictment alleges that the defendants executed a “fictitious employer” scheme from about March 2012 to January 2013.

Nash, Berts, Buchanan and Davis prepared and distributed flyers in low-income areas that appeared to be from the “Full Circle Fund” which purportedly provided assistance vouchers for rent, food, furniture, clothing and cash to individuals.  Individuals distributing the flyers were instructed by Nash to distribute the flyers in downtown areas and avoid neighborhoods, according to the indictment.

The flyers directed people to call a toll-free number. Callers to the Full Circle Fund were required to provide their names, dates of birth and Social Security numbers, according to the indictment.

Nash and others then submitted false paperwork to states’ unemployment-insurance offices in which the defendants registered 10 companies that did not actually exist and reported non-existent earnings for fictitious employees, according to the indictment.

The defendants then submitted false claims for unemployment-insurance benefits of the purported employees in California, Ohio, North Carolina, Texas, Indiana and Kansas. In doing so, the defendants  used actual individuals’ personal identifying information that the defendants had obtained through misrepresentations, according to the indictment.

Unemployment insurance benefits cards for the fictitious employees were then mailed to at least five different addresses in Ohio. The debit cards were collected and maintained at Nash’s residence in Cleveland Heights. The defendants then used the debit cards at various ATMs to withdraw the money, according to the indictment.

Approximately $361,341 in fraudulent unemployment benefits were paid as a result of this scheme, according to the indictment.

Nash deposited more than $200,000 in cash into two personal bank accounts in 2012, representing proceeds from the scheme. He also purchased a 2008 Land Rover for $35,000 using money from the scheme, according to the indictment.

The case is being prosecuted by Assistant United States Attorneys, Robert W. Kern, M. Kendra Klump, and James Morford following an investigation by the Department of Labor’s Office of the Inspector General, the United States Secret Service, the United States Postal Inspector, and the Social Security Administration’s Office of Inspector General. Cleveland Heights Police Department also assisted the investigation.

If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal records, if any, the defendants’ role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.