Nevada lost $136,000 in unemployment scheme

Thursday, Oct. 7, 2004 | 9:01 a.m.

CARSON CITY -- An identity theft ring that was able to steal $16 million from five state unemployment trust funds in the West was able to get away with $136,000 from Nevada.

Mike Ryan, in charge of preventing theft in the state Employment Security Trust Fund, said Wednesday the pilfering of the Nevada fund was stopped early. The detection prevented another $200,000 from being lost from the fund that totals more than $400 million.

It was nicknamed the "Gold Rush" case where a group was able to steal 60,000 IRS forms with the names and identification codes.

Based in Central California, Ryan said the ring imported Hispanics from Mexico to help in filing the claims for unemployment using the stolen identification material.

"It was very successful in California," he said. During the 16-month investigation, Ryan said his staff detected 146 identity theft claims and found that 59 were paid.

Ryan said the ringleader was captured in Fresno where authorities found $2 million in cash. He said the suspect was getting ready to leave for Mexico the following day where he had purchased a large hacienda. Seven of the ten defendants have been convicted in other states and have received prison terms of three to five years. He said more than $93 million in restitution was ordered.

During the investigation, Ryan told the council, the state received federal funds to build a new identity theft detection program. And the issue became a national priority within the U.S. Labor Department.

The state department now matches identity information with the state Department of Motor Vehicles. In the first two months of this matching program, more than 30 callers have stopped their request for jobless benefits. And the department has detected two identity theft claims.

People mostly file for unemployment benefits over the telephone.

Ryan said that procedure is now tightened.