Editor's note: The above video on an investigation into Washington's Employment Security Department paying fraudulent claims to its own workers aired Jan. 14, 2021.
TACOMA, Wash. -- Authorities say a former employee with the state Employment Security Department (ESD) was arrested and charged with defrauding the government of at least $360,000 in jobless benefits.
The U.S. Attorney’s Office in Seattle said Friday that Reyes De La Cruz, III, 47, of Moses Lake is “alleged to have personally enriched himself by at least $130,000” and to have helped others fraudulently obtain tens of thousands of dollars in benefits.
"Dedicated investigators continue to build criminal cases against those who sought to unlawfully enrich themselves during our country’s pandemic crisis," said Acting U.S. Attorney Tessa M. Gorman. "In this case, an insider used his official access and knowledge to illegally enrich himself. Even as ESD faced the challenges of processing the high volume of legitimate claims, he chose to take advantage of his position to worsen the unprecedented fraud on unemployment benefits."
De La Cruz was hired as an intake agent in April 2020 to help the ESD deal with the influx of filings for pandemic unemployment benefits. He had previously worked for the ESD from 1996 to 2003, officials said.
De La Cruz is being charged with six counts of wire fraud, nine counts of bribery of an agent of an organization receiving federal funds, as well as one count of extortion and four counts of aggravated identity theft, according to the U.S. Attorney's Office.
The 20-count indictment details multiple ways De La Cruz allegedly used his access to the ESD claims database to defraud the benefits system.
According to the U.S. Attorney's Office, De La Cruz allegedly filed claims using other people's personal information and then had the benefits paid to debit cards that were mailed to Moses Lake, Wash., addresses where he could retrieve them.
Even after De La Cruz was terminated on Oct. 1, 2020, he attempted to restart claims payments to those debit cards to take advantage of additional pandemic benefits, according to the U.S. Attorney's Office.
De La Cruz also allegedly accepted bribes in exchange for engineering benefit payments for his friends, family, or acquaintances by making false entries in the claims database.
The U.S. Attorney's Office said, in many cases, the person did not qualify for benefits, but De La Cruz allegedly manipulated the claims database so that the claimants received lump sum retroactive payments that sometimes amounted to tens of thousands of dollars. The claimants would then pay De La Cruz a portion of the lump sum.
In some cases, when claimants refused or resisted paying De La Cruz, he allegedly threatened to terminate the claim if they did not pay him, the U.S. Attorney's Office said.
The ESD eventually uncovered evidence of fraud, terminated De La Cruz's employment, and referred the case to the Department of Labor Office of Inspector General. The FBI later joined the investigation.
Local authorities arrested De La Cruz Friday morning in Moses Lake, according to the U.S. Attorney's Office. It wasn't immediately clear if he had an attorney.
De La Cruz is expected to make his initial appearance on the indictment Monday in Spokane, and on a later date will appear in the U.S. District Court in Tacoma where the case has been filed.
If convicted, wire fraud that relates to a presidentially declared major disaster or emergency is punishable by up to 30 years in prison, the U.S. Attorney's Office said.