Ex-unemployment claims manager sentenced in pandemic scheme that netted $1M

A former Michigan Unemployment Insurance Agency lead claims examiner was sentenced to two years in federal prison in connection with a pandemic-related unemployment insurance fraud scheme that siphoned about $1 million from the state, the U.S. Attorney's Office announced Thursday.

Jermaine Rose pleaded guilty in April to conspiracy to commit wire fraud.

"Corrupt public servants compromise the ability of the government to function effectively and undermine confidence in all public programs," U.S. Attorney Dawn Ison said in a statement. "This prosecution reflects the seriousness with which my office takes corruption and fraud in the public sector as well as our commitment to prosecuting those who used a national crisis as an opportunity to defraud the public."

Investigators identified Rose through an investigation in 2020 involving personnel from the U.S. Department of Labor and U.S. Secret Service amid allegations about a scheme aimed at seizing millions of dollars in pandemic unemployment assistance.

According to a plea agreement filed in U.S. District Court, Rose worked from home and could use his credentials to approve specific unemployment insurance claims submitted to the state agency. In April 2020, he entered into an agreement with others to defraud it, the filing stated.

"Rose’s co-conspirators would electronically submit fraudulent claims to MUIA in the names of various individuals, some of whom would be victims of identity theft and some of whom were entirely fictitious people," investigators said. "These co-conspirators would make various false statements in the applications attesting to the eligibility of these purported claimants and would often upload fictitious documentation to support those fraudulent claims."

The co-conspirators would alert Rose about the claims and he used his state system access to approve them and release the benefits, typically through mailed Bank of America debit cards, according to the plea agreement.

Rose often was paid between $50 and $150 per claim he touched, officials said.

While some who sought Rose had legitimate claims and paid him to expedite the payment process, many submitted fraudulent ones in bulk, according to the plea agreement. 

"Court documents indicate that while it is difficult to provide precise loss figures associated with Rose’s criminal scheme, a conservative estimate of the actual loss in this case is approximately $1,011,000," officials said Thursday.

Rose, who had been with agency since 2004, was initially suspended then terminated from his position.

He was among others in the state charged in connection with pandemic aid theft or fraud.

This spring, two Metro Detroit residents federal prosecutors called a "pandemic-era Bonnie and Clyde" were sentenced in connection with an unemployment insurance benefit fraud scheme.

A Farmington Hills man who showcased his luxurious lifestyle online also was sentenced to 75 months in federal prison in connection with a scheme, and prosecutors announced a state unemployment insurance examiner inappropriately released payments on 101 claims totaling more than $1.6 million.

A state audit last year found the Unemployment Insurance Agency lost more than $8.5 billion to suspected fraudulent payments amid record claims and persistent attempts at fraud.

In December, the Secret Service reported at a minimum, nearly $100 billion had been stolen from COVID-19 relief programs.