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Feds arrest 15 suspected of defrauding unemployment insurance programs

Target 12

PROVIDENCE, R.I. (WPRI) — Rhode Island U.S. Acting Attorney Richard Myrus on Thursday announced 15 people have been arrested and accused of defrauding unemployment insurance programs tied to federal COVID-19 relief funds.

The state’s top federal prosecutor announced the arrests during a news conference in Providence, accusing the defendants — all Rhode Islanders — of fraudulently filing claims through unemployment insurance programs across 11 states. The defendants filed claims for an estimated $578,571, including $126,000 in Rhode Island, according to prosecutors.

“It’s disgraceful that anyone would attempt to fraudulently obtain [federal] funds intended for hard-working Americans during the current health crisis,” Myrus said, adding that this type of fraud is rampant across the country.

The arrests were tied to FBI-led searches of homes in Providence on Tuesday. 12 News cameras spotted agents investigating properties on Stonelaw Avenue and Salisbury Street, which a FBI spokesperson said was part of a court-authorized search warrant.

FBI Boston Special Agent in Charge Joseph Bonavolonta on Thursday said his agency helped execute 14 federal warrants, resulting in the seizure of $46,000 in cash and four loaded handguns from three convicted felons. Beyond the 15 people arrested for fraud, Bonavolonta said investigators also arrested two more people wanted on outstanding warrants.

“Sadly, the victims of these crimes are unemployed and are relying on these benefits,” he said.

At least one defendant was able to “line his pockets” with almost $90,000, according to the investigators.

The charges were unsealed in Rhode Island U.S. District Court Thursday afternoon, and multiple suspects were discovered in part because they took out large sums of money at Twin River Casino.

According to a sworn affidavit filed by R.I. State Police Trooper Courtney Elliott, investigators were notified in August about several “suspicious high-dollar cash advances” made at the Lincoln casino.

Upon further investigation, police said they discovered Tyrone Hazard of Central Falls had made a $9,000 cash advance using a California Employment Development Visa debit card, which is issued through the state of California to provide unemployment insurance, according to the affidavit.

After getting the cash, Hazard left the casino without playing any games, according to the affidavit. Investigators said they later discovered Hazard had previously made two different unemployment insurance claims in California and Massachusetts, according to court documents.

Hazard’s defense attorney did not immediately respond to a request for comment.

Likewise, defendant Rashaad Smith Muskelly of Lincoln is accused of taking out two cash advances at Twin River, according to the complaint. Muskelly is accused of filing for unemployment insurance in eight states: Arizona, California, Massachusetts, Nevada, New York, Rhode Island, Virginia and Texas.

Muskelly’s defense attorney did not immediately respond to comment.

“Every dollar stolen is a dollar that can’t go to a Rhode Islander or American in-need,” R.I. Attorney General Peter Neronha said during the news conference.

As Target 12 reported last month, the R.I. Department of Labor and Training estimates almost 43% of 900,000 claims for jobless benefits in Rhode Island over the past year were suspected to be fraudulent. While many people have become victims of identify theft, Myrus said the 15 Rhode Islanders arrested all used their own names when trying to obtain unemployment insurance money.

“Quite frankly, I’m mad, I’m angry that it happened,” acting DLT director Matt Weldon told Target 12 last month. “I’m angry that our taxpaying employers that contribute to our fund were victimized.”  

The arrests announced Thursday are part of a broader effort among federal investigators to crack down on fraud tied to COVID-19 relief funds. The U.S. attorney’s office said it has investigated and charged 23 people since May 2020. The fraudsters had targeted a total $31 million in federal relief money, according to investigators.

Rhode Island has received billions in federal relief because of the coronavirus public health crisis, including an initial $1.2 billion from the Coronavirus Aid. Relief and Economic Security Act authorized shortly after the pandemic started.

Below is a list of the 15 defendants all charged separately. Attorneys representing the defendants either declined to comment or did not immediately respond to request for comment. One defendant was not yet assigned a defense attorney, according to court documents.

  • Deanna Alston, 32, of East Providence
  • Vallah Brown, 29, of Providence
  • Donovan Brown, 34, of Providence
  • Keishon Brown, 32, of Providence
  • Deeshawn Gadson, 32, of Providence
  • Derrick Gadson, 34, of North Providence
  • Jyireal Gadson, 23, of Providence
  • Tyrone Hazard, 20, of Providence
  • Jesse Hazard, 30, of Providence
  • Rashaad Hill, 21, of Providence
  • Michael Moran Lamb, 34, of Cranston
  • Rashaad Muskelly, 30, of Lincoln
  • Jamel Newman, 23, of Providence
  • Darren Robinson, 20, of Providence
  • Francois Parker, 20, of Providence

This is a breaking news story. It will be updated.

Tim White (twhite@wpri.com) is the Target 12 managing editor and chief investigative reporter at 12 News, and the host of Newsmakers. Connect with him on Twitter and Facebook.

Eli Sherman (esherman@wpri.com) is an investigative reporter for WPRI 12. Connect with him on Twitter and on Facebook.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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