A former State of Michigan Unemployment Insurance Agency employee and her former romantic partner have been sentenced for their roles in a fraud conspiracy that stole more than $250,000 from unemployment assistance programs.
U.S. Attorney Jerome F. Gorgon Jr. announced that Timeka Johnson, 44, was sentenced to 3.5 years in federal prison after pleading guilty to aggravated identity theft and conspiracy to engage in wire fraud. Her co-conspirator Ray Anthony Eddington, 45, received a 3-year federal prison sentence for conspiracy to commit wire fraud.
The sentences were handed down by United States District Court Chief Judge Stephen J. Murphy III. Both defendants were ordered to pay $250,001 in restitution.
Johnson worked as an examiner at the Michigan Unemployment Insurance Agency. Her job responsibilities included reviewing and verifying unemployment insurance claims. Instead, she exploited her insider access and authority to process fraudulent claims under the names of unsuspecting third parties.
Court records show Johnson repeatedly accessed unemployment claim information without authorization, closed fraud prevention warnings that would have flagged illegal activity, and uploaded fake documentation to push through illegitimate benefit claims. She falsely certified eligibility for unemployment payments, directed another UIA employee to illegally access and modify claim files in exchange for money, issued unauthorized debit cards in the names of claimants, and made cash withdrawals of benefits issued to fraud victims.
Investigators determined that many of the fraudulent unemployment funds were withdrawn directly from local ATMs by Eddington.
More than $250,000 in stolen unemployment assistance was ultimately paid out as a result of the scheme.
U.S. Attorney Gorgon condemned the conduct, emphasizing the betrayal of public trust. He said it is “despicable to abuse your position of trust so that you can steal from a program needed to help the unemployed.”
Joseph V. Cuffari, Inspector General for the Department of Homeland Security, said “Government employees who betray their duty to protect taxpayer funds will be held accountable, adding that investigators remain committed to stopping those who target vulnerable populations.”
Megan Howell, Special Agent in Charge for the U.S. Department of Labor Office of Inspector General, said “Today’s sentencings of Ray Eddington and Timeka Johnson demonstrate the Office of Inspector General’s commitment to investigate bad actors who defraud the unemployment insurance program for financial gain, particularly those like Timeka Johnson who abused her position of trust as a Unemployment Insurance Examiner. We will continue to work with our law enforcement partners to bring to justice those who seek to exploit these critical U.S. Department of Labor programs, especially when it involves serious insider threats.”
“As a State of Michigan Unemployment Insurance Agency Investigator, Timeka Johnson had insider access and the authority to help people—instead, she abused that trust by teaming up with Ray Eddington and others to commit identity theft and fraud. Their actions harmed the very communities that rely on these unemployment resources the most,” said Jennifer Runyan, Special Agent in Charge of the FBI Detroit Field Office. “This sentencing should serve as a reminder to anyone who defrauds Michigan’s assistance programs: FBI Detroit will never stop working to hold those accountable who abuse them. I want to recognize my team from the FBI Detroit Area Corruption Task Force, alongside our partners at the Department of Homeland Security Office of Inspector General, the Department of Labor Office of Inspector General, the State of Michigan Unemployment Insurance Agency, and the U.S. Attorney’s Office for the Eastern District of Michigan for their thorough work and successful prosecution in securing this sentence.”
UIA Director Jason Palmer said the case proves “crime does not pay” and emphasized the agency’s aggressive efforts to recover stolen taxpayer funds and hold former employees who break the law fully accountable.
The case was prosecuted by Assistant United States Attorney Andrew J. Yahkind following a joint investigation by DHS-OIG, DOL-OIG, the FBI, and the Michigan Unemployment Insurance Agency.
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