GDOL employee pleads guilty to diverting unemployment benefits to his own account

U.S. District Court (PNC News file photo)

A Guam Department of Labor employee has pleaded guilty in district court to unemployment fraud.

Jerome Michael Cruz, was employed by GDOL as a customer service representative assisting customers with Pandemic Unemployment Assistance (PUA) and Federal Pandemic Unemployment Compensation (FPUC) claims.

On September 26, 2020, while fully employed at GDOL, Cruz submitted an application for PUA and FPUC benefits. In that application, Cruz falsely
certified that he was unemployed and that he was eligible for PUA and FPUC benefits, court documents stated.

The application contained numerous warnings that false statements are punishable under law. As a result of these false statements, Cruz received $10,935 in benefits to which he was not entitled, including $3,000 in FPUC benefits.

These benefits constituted property under the care, custody, or control of the GDOL and had a value of over $5,000. According to the government, Cruz knew his statements asserting that he was unemployed and eligible for PUA and FPUC were false and that his conduct was unlawful. The false statements were material to the approval or denial of an application for PUA and FPUC benefits.

On October 13, 2020, after Cruz had been transferred within GDOL and lost his access to the PUA and FPUC computer system, Cruz used the login credentials of another GDOL employee to access the GDOL computer system used to process PUA and FPUC benefits, the government stated.

This GDOL computer system is used in or affects interstate or foreign commerce or communication. Upon accessing the GDOL computer system without authorization, Cruz modified an existing PUA claim for another person in order to change the payment method from paper check to direct deposit and to route that claimant’s benefits to a bank account that Cruz controlled, court documents stated.

As a result of these actions, Cruz obtained $2,415 in fraudulent benefits.

According to court documents, Cruz made further attempts to modify existing PUA and FPUC claims in order to divert the claimants’ benefits to bank accounts he controlled as well as additional attempts to claim PUA and FPUC benefits on his own behalf to which he was not entitled to.

These additional attempts were flagged for fraud by GDOL employees and were not paid out. In total, Cruz obtained $13,350.00 in fraudulent benefits and attempted to obtain an additional $79,650.00 in fraudulent benefits for a total intended loss of $93,000.

Reacting to the case, GDOL released the following statement: “The Guam Department of Labor was fully aware of the fraudulent activity committed by the temporary PUA customer service representative Jerome Cruz. We presented the information to the federal side and have worked closely with the FBI, the Office of Inspector General as well as the Attorney General’s office from the beginning. Preventing fraud has always been a top priority. We thank the FBI for working so diligently in closing this case.”