Jul-01-14 Four Men From Northern New Jersey Charged With Conspiring To Steal More Than $180,000 From The State By Filing False Unemployment Claims
The Division of Criminal Justice obtained a six-count state grand jury indictment on June 26 charging the following four men.
- Stephen Pirrone, 53, formerly of Old Tappan and Norwood, N.J., currently of Paramus;
- Wilfredo Sanchez, 37, of Newark;
- Andre Brown, 36, of Woodland Park; and
- Jose Flores, 38, of Newark.
The indictment was not made public until today, when defendants Pirrone, Sanchez and Flores were arrested. They are being held with bail set at $75,000 for each. Brown was not arrested. He will be ordered to appear in court for arraignment at a later date. All four defendants are charged with second-degree conspiracy. Pirrone is charged with second-degree counts of theft by deception and money laundering. Sanchez, Brown and Flores are charged with third-degree counts of theft by deception and money laundering. Sanchez and Flores also are charged with second-degree identity theft.
Pirrone allegedly originated the fraudulent scheme and enlisted other defendants. Between November 2006 and March 2013, the four defendants allegedly collected more than $180,000 in unemployment benefits on seven fraudulent unemployment insurance claims. All of the false claims were based on fraudulent employer quarterly wage statements submitted to the state in the names of two businesses that were defunct: a trucking company formerly operated by Pirrone called Culver Transportation, Inc., and a bankrupt trucking company from which Pirrone formerly rented office and terminal space.
Since 2011, the Department of Labor has been cracking down on unemployment insurance fraud, saving the New Jersey Unemployment Trust Fund an estimated $448 million to date. Among the many anti-fraud practices and procedures adopted are software and program changes that enable the department to detect false claims by cross-checking data internally and with other databases to flag invalid information or suspicious patterns involving common elements among multiple claims, such as identical residences or Internet protocol (IP) addresses. The investigation into Pirrone and his co-defendants began when their claims were flagged based on their use of the same defunct employers and other common elements.
“We have joined forces with the Department of Labor and are using their cutting-edge security upgrades to come down hard on con artists who steal unemployment benefits,” said Acting Attorney General Hoffman. “We will diligently guard these benefits, which are a financial lifeline for New Jersey workers who temporarily find themselves out of work.”
“Working with the Department of Labor, we have charged numerous defendants over the past two years in indictments targeting major unemployment fraud schemes,” said Director Elie Honig of the Division of Criminal Justice. “We want these criminals to know that we are wise to their tricks, and we have both the technology and the will to bring them to justice.”
“The Attorney General has been a strong partner in my department’s efforts to pursue more and more of these fraud cases as criminal acts. While we have developed strong procedures to prevent fraud and stop money from leaving state coffers, we are not going to forgive those who think they have found ways to defeat our system and dupe the taxpaying public,” said Commissioner Harold J. Wirths of the New Jersey Department of Labor and Workforce Development.
The state’s investigation revealed that two claims were filed in the name of Pirrone, generating benefits of $46,287 and $8,336. One claim was filed in the name of each the other defendants, generating benefits of $59,400 for Brown, $34,827 for Sanchez, and $25,505, for Flores. Sanchez and Flores also allegedly filed two claims using stolen identities, which generated benefits of $7,943 and $1,220. Sanchez and Flores allegedly attempted to file additional claims using eight other false identities, but those claims were determined to be invalid by the Department of Labor and no benefits were distributed.
Pirrone owed a debt to Brown and allegedly used the scheme to pay off that debt. Pirrone also allegedly taught the scheme to Sanchez, who worked with Flores in filing false claims. Sanchez and Flores allegedly paid part of the proceeds of their false claims to Pirrone by wiring money to his commissary account in federal prison. Pirrone was sentenced to federal prison in March 2012 for fraudulently collecting federal tax refunds by filing false returns.
Deputy Attorney General Debra A. Conrad presented the case to the state grand jury for the Division of Criminal Justice Specialized Crimes Bureau. The investigation was conducted for the Division of Criminal Justice by Detectives Lynn Patrick Fitzgerald and Glenn Stanton. The investigation was conducted for the Department of Labor and Workforce Development by Supervising Investigator Michael Kulyk and Supervisor of Investigations Michael B. Marich of the Bureau of Benefit Payment Control, under the direction of Charles J. Walkowiak, Director of Fraud Prevention and Risk Management.
Second-degree crimes carry a sentence of five to 10 years in state prison and a fine of up to $150,000, while third-degree crimes carry a sentence of three to five years in state prison and a fine of up to $15,000. The money laundering counts carry an enhanced fine of up to $500,000. The indictment is merely an accusation and the defendants are presumed innocent until proven guilty.
The indictment was handed up to Superior Court Judge Pedro J. Jimenez Jr. in Mercer County, who assigned the case to Bergen County, where the defendants will be ordered to appear at a later date for arraignment.