All five of these defendants face second-degree charges, including counts of theft by deception and conspiracy, which carry a sentence of five to 10 years in state prison. In addition, Terry Dilligard II is charged with first-degree money laundering, which carries a sentence of 10 to 20 years in prison.

These five individuals and 26 other defendants are charged with filing false unemployment insurance claims with the Department of Labor between August 2006 and November 2010 which resulted in the theft of more than $2 million in unemployment benefits.  The claims were based upon fictitious assertions of previous employment held by the claimants, primarily with the University of Medicine and Dentistry of New Jersey, Newark Beth Israel Hospital and two private employers. 

“This is an outrageous case of fraud and greed that revolves around members of a Newark family who allegedly orchestrated schemes to steal over $2 million from the state’s unemployment insurance fund,” said Attorney General Chiesa. “In this tough economy, unemployment benefits are a financial lifeline for hardworking New Jersey residents who have lost their jobs, and we cannot afford to have them drained by con artists.  We will aggressively prosecute such crimes.”

Commissioner Wirths noted that the Department of Labor has implemented new security measures under the administration of Governor Chris Christie to eliminate weaknesses exploited by the defendants and detect fraud in connection with claims filed for unemployment benefits.  Additional details about those measures are provided below.

“It’s harder to retrieve money once it’s out the door. We are now preventing fraud before it happens, and if we catch people collecting unemployment when they shouldn’t, we will go after them,” said Commissioner Wirths. “My goal is to protect the Unemployment Insurance Fund for those people who paid into it and, because they fell on hard times, need the safety net it provides. Those who would illegally deplete it will go to prison.”

Arrest warrants were issued for 26 defendants. Yesterday, detectives, investigators and agents of the cooperating law enforcement agencies arrested more than a dozen of the wanted individuals, including Janice Dilligard, Valentine and Allen.  Terry Dilligard II remained a fugitive sought on the state’s arrest warrant.  Most of those arrested were lodged in the Mercer County Jail.

One indictment announced today charges Dilligard II, his ex-girlfriend, Valentine, and his father, Dilligard Sr., with defrauding the State of New Jersey of a total of $1,489,411 in unemployment benefits.  Dilligard II and his father are charged with stealing $174,848 of that total by filing claims using identities stolen from nine voters in Florida.  Dilligard Sr., who was a city commissioner in Florida, allegedly obtained their personal information, including Social Security numbers and dates of birth, while registering voters.  The son allegedly paid the father a share of the benefits that were fraudulently obtained. They are charged with second-degree identify theft for that alleged conduct.

The son is charged alone with stealing another $810,345 of the total covered by that indictment, and he and Valentine are charged together with stealing $478,768. Valentine is charged alone with stealing $25,450.  Dilligard II and Valentine allegedly filed false claims in the names of numerous individuals. Twenty-one of those individuals are charged in 21 separate indictments with filing or allowing Dilligard II to file false claims in their names and sharing the stolen benefits with him.

A separate indictment unsealed yesterday charges Janice Dilligard and her mother, Janice Allen, with stealing $585,304 in unemployment benefits by filing false claims in the names of numerous claimants, including relatives and people who were deceased.  Their alleged conspiracy was separate from the conspiracies of Terry Dilligard II, Dilligard Sr. and Valentine.  The following five defendants were also named in the indictment charging the mother and daughter:

They allegedly assisted the two women in the fraud and shared in the stolen unemployment benefits.  Each of the five is charged with second-degree conspiracy and third-degree theft by unlawful taking.

In many instances, individual false claims allegedly filed by the defendants would generate tens of thousands of dollars in benefits.  Benefit amounts on a single claim reached as high as $56,915.  The two main indictments combined allege a total of $2,074,715 in stolen benefits.

“This was a complex case involving numerous conspirators and extensive financial evidence that had to be tied together,” said Stephen J. Taylor, Director of the Division of Criminal Justice. “Our Labor Prosecutions Unit and the Department of Labor conducted a very skillful and thorough investigation.  We will continue this partnership to protect the integrity of the unemployment insurance program.”

The indictments were presented to the state grand jury by Deputy Attorneys General Phillip Leahy and Anthony Torntore.  The investigation was conducted for the Division of Criminal Justice by Detective Kimberly Allen and Detective Eric Ludwick of the Financial & Computer Crimes Bureau, and Deputy Attorneys General Leahy and Torntore of the Labor Prosecutions Unit, supervised by Supervising Deputy Attorney General Andrew Butchko, Chief of the Specialized Crimes Bureau.  Retired Supervising Deputy Attorney General Scott Patterson also worked on the investigation.  The investigation was conducted for the Department of Labor & Workforce Development, Bureau of Benefit Payment Control, by Supervising Investigator Micheal Kulyk, Supervisor of Investigations Michael Marich, former Supervising Investigator Susan Zamparelli, and former Acting Chief of the Bureau of Benefit Payment Control John Galvin.  Attorney General Chiesa thanked the Office of Labor Racketeering & Fraud Investigations within the U.S. Department of Labor’s Office of Inspector General (OIG), under the direction of Robert L. Panella, special agent in charge of the OIG New York Regional Office, for its valuable assistance throughout the investigation. He also thanked the following agencies which provided assistance at various times throughout the investigation: Boonton Police Department, New Jersey Human Services Police and the U.S. Marshals Service NY/NJ Regional Fugitive Task Force.

The defendants allegedly filed most of the false claims by submitting online forms to the Department of Labor, including the required personal identifiers of real people as well as fictitious information on previous employment. At the time of the alleged conduct, unemployment benefits could be paid by check or could be deposited directly into a bank account if the claimant provided account information.  Most of the benefits paid on the alleged false claims filed by Terry Dilligard II were deposited directly into Internet bank accounts which were set up in the names of the claimants but secretly controlled by Dilligard II.  The accounts had affiliated debit cards, which Dilligard II allegedly used to withdraw money at automated teller machines.  He allegedly gambled large sums of the stolen benefits at a casino in Atlantic City.

Janice Dilligard and Janice Allen allegedly had some stolen benefits deposited directly into bank accounts, but they also allegedly obtained numerous benefit checks, which they had mailed to various addresses where they would have access to them.  Many checks were endorsed by Allen and deposited into her bank account. In addition, Obiri-Ibe, Dononcourt, Ross, Robinson and Evans allegedly endorsed benefit checks and deposited them into their bank accounts, sharing the proceeds. 

All five primary defendants are charged with money laundering in connection with transactions involving stolen benefits.  Terry Dilligard II faces two counts of first-degree money laundering for allegedly possessing criminal proceeds and engaging in transactions intended to conceal the nature and source of those proceeds.  Valentine, Allen and Janice Dilligard are each charged with second-degree money laundering, and Dilligard Sr. is charged with third-degree money laundering.  Dilligard II also faces a second-degree money laundering count, and Allen faces a third-degree count.

The investigation began in 2010 when a debit card company affiliated with a bank used by the defendants alerted the New Jersey Department of Labor & Workforce Development about suspicious activity related to debit accounts, including account holders who were deceased and unemployment benefits for multiple claimants being deposited into the same account. The labor department’s fraud unit, the Bureau of Benefit Payment Control, identified numerous false claims linked to the accounts and alerted the Division of Criminal Justice. The Division of Criminal Justice and Department of Labor & Workforce Development then commenced their joint investigation, “Operation Labor Day.”

The Department of Labor & Workforce Development has implemented the following anti-fraud measures since the alleged criminal conduct in this case occurred:

The following 21 defendants were charged in 21 separate state grand jury indictments with third-degree conspiracy, third-degree theft by deception, and fourth-degree unsworn falsification: 

First-degree crimes carry a sentence of 10 to 20 years in state prison and a fine of up to $200,000; second-degree crimes carry a sentence of five to 10 years in state prison and a fine of up to $150,000; third-degree crimes carry a sentence of three to five years in state prison and a fine of up to $15,000; and fourth-degree crimes carry a maximum sentence of 18 months in prison and a fine of up to $10,000. The money laundering counts carry an enhanced fine of up to $500,000.

The indictments are merely accusations and the defendants are presumed innocent until proven guilty.  The indictments were handed up to Superior Court Judge Pedro J. Jimenez, Jr. in Mercer County, who assigned them to Mercer County.  The indictments are posted with this release at www.njpublicsafety.com.

Attorney General Chiesa and Director Taylor noted that the Division of Criminal Justice has established a toll-free tipline 1-866-TIPS-4CJ for the public to report corruption, financial crime and other illegal activities.  The public can also log on to the Division of Criminal Justice webpage at www.njdcj.org to report suspected wrongdoing. All information received through the Division of Criminal Justice tipline or webpage will remain confidential.

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Labor Commissioner Harold J. Wirths (center) along with Attorney General Jeffrey S. Chiesa (second right) announce indictments charging 31 in alleged schemes defrauding the State Department of Labor and Workforce Development (LWD) by filing unemployment benefits using stolen identities. Commissioner Wirths highlighted his Department’s new security measures to eliminate weaknesses exploited by the defendants and to detect fraud. Pictured (L-R): Ronald Marino, LWD Assistant Commissioner of Income Security; Thomas Sommero, USDOL;  Labor Commissioner Harold J. Wirths; Attorney General Jeffrey S. Chiesa; and Stephen Taylor, Director, Division of Criminal Justice.