Chicago-Area Woman Sentenced for $7 Million Unemployment Insurance Scam

Leticia Garcia, right, stands while one of her employees sits, in a still from a video taken by a confidential informant. U.S. Department of Justice exhibit photo

Leticia Garcia set up her garage in a Chicago suburb to look like a bustling home office, outfitting it with computers, employees and posted business hours. But the grandmother was actually conducting a simple unemployment insurance scam, one that stole almost $7 million from the state of Illinois, attracted a federal investigation and on Monday earned Garcia a four-year prison sentence.

Garcia would pass out business cards at gas stations and on some days 10 to 15 people would walk into her office and hire her to file unemployment insurance claims for them, according to court papers filed by federal prosecutors. Many of her clients were Mexican-born immigrants without lawful immigration status or work permits, which made them ineligible for unemployment benefits.

The Illinois Department of Employment Security website asks applicants if they are U.S. citizens and for the city of their birth, and Garcia usually checked the U.S. citizen box—even though she knew her clients were not. She also kept a list of U.S. cities near the Mexican border, handwritten and neatly organized, and selected from it when filling out a client's application.

Garcia, who lived about an hour from Chicago in Round Lake Beach, also submitted unemployment claims with false Social Security numbers. When a confidential informant told her he was concerned because he bought his Social Security number "on the street," Garcia and her employee reassured him that wouldn't be a problem. Garcia told the informant she had clients who used false Social Security numbers for five or six years without problems, and that nine out of 10 applications were approved.

During the time Garcia operated her fraud scam, from about 2009 to 2012, she deposited about $37,000 in cash into accounts in her daughter's name, listed her occupation on tax returns as "housewife" and didn't report any income. When federal agents finally searched her home in May 2012, they found evidence she had submitted or prepared claims for at least 668 people.

"Defendant committed wholesale fraud against a state program designed to help some of the most vulnerable state residents get back on their feet after an unexpected job loss," federal prosecutors said in a sentencing memo, which called Gacia's crime "fraud on almost an industrial scale" and said the scam took money from unemployed Illinois residents who submitted legitimate claims.

"Garcia defrauded taxpayers of millions of dollars by assisting hundreds of ineligible workers in their efforts to receive unemployment insurance benefits intended for Americans who were out of work," James Vanderberg, special agent-in-charge of the U.S. Department of Labor's Office of Inspector General in Chicago, said in a press release. "The Office of Inspector General will continue to work with our law-enforcement partners to investigate those who attempt to fraudulently obtain money from Department of Labor Programs."

A letter filed by Garcia's defense attorney Paúl Camarena before she was sentenced asked for leniency, arguing Garcia didn't knowingly file each fraudulent unemployment insurance claim. "Defense counsel would respectfully submit that the court cannot reasonably extrapolate that Ms. Garcia knew of every one of her clients who were ineligible," the letter states.