Mother, son indicted in unemployment benefits scheme

BOSTON —  A mother and son, and a former co-worker of the son, have been indicted in connection with the alleged theft of hundreds of thousands of dollars in unemployment benefits by creating false businesses and using other people's identities to collect jobless compensation from the state.

Elis Reyes, 26, of Bronx N.Y., his mother Teresa Cruz Colon, 51, of Leominster, and co-worker Atia Dobson, 31, of Fitchburg, are facing multiple charges as a result of the indictments by a special statewide grand jury, according to a press release from the office of Attorney General Martha Coakley.

Mr. Reyes faces 32 counts of unemployment fraud, 34 counts of larceny over $250, five counts of forgery, six counts of identity fraud and one count of intimidation of a witness.

Ms. Colon faces 13 counts of unemployment fraud and 13 counts of receiving stolen property.

Ms. Dobson faces six counts of identity fraud and one count of larceny over $250.

“We allege that Mr. Reyes and his co-defendants devised multiple schemes to steal hundreds of thousands of dollars from the commonwealth and businesses at a time when many people are out of work and struggling to make ends meet,” Ms. Coakley said.

“These types of crimes not only hurt employers in Massachusetts, but they also put a significant strain on the state by draining resources needed to help individuals that are legitimately unemployed,” she said the in press release.

In May 2010, the attorney general's office began an investigation after the matter had been initially investigated and referred by the Executive Office of Labor and Workforce Development's Department of Unemployment Assistance. It is alleged that Mr. Reyes orchestrated three unemployment fraud schemes between 2006 and 2010 in which he defrauded the state and two additional schemes in which he defrauded private companies.

Initially, Mr. Reyes worked for a staffing company that placed temporary workers in various businesses. One of the companies that used the staffing company was a Leominster based manufacturing company that went out of business in 2006. The company contacted the labor office to prepare officials there for individuals who would apply for unemployment benefits as a result of the company's closing. Authorities allege that Mr. Reyes used his knowledge of the company to steal more than $53,000 in unemployment benefits for employees who never worked at the company. The checks issued by the EOLWD/DUA were allegedly deposited to bank accounts owned by individuals associated with Mr. Reyes, and his mother.

Investigators discovered two more schemes Mr. Reyes allegedly orchestrated. In the first scheme, authorities allege that Mr. Reyes created his own staffing company, Abeitus Solutions, which he incorporated in Leominster. Mr. Reyes registered Abeitus with the EOLWD/DUA and authorities believe fraudulently obtained unemployment benefits for more than a dozen “employees” that he claimed had been terminated from his company. Based on that false information, the labor department paid more than $228,000 in unemployment benefits. Authorities allege that Mr. Reyes had these checks sent to addresses associated with himself and his mother, who investigators believe also cashed and deposited the checks.

In March 2009, Mr. Reyes created another staffing company, Itane Ventures. In this instance Itane was a fictitious company. It is alleged that Mr. Reyes again filed fraudulent unemployment claims for fake employees who had been laid off from Itane. As a result, Mr. Reyes received nearly $125,000 in unemployment benefits.

Investigators also discovered that Mr. Reyes allegedly orchestrated two other schemes in which he stole from his former employers. It is believed that Mr. Reyes and his co-worker, Ms. Dobson, stole $77,000 from a temporary staffing agency where both of them had worked. Mr. Reyes accomplished this by contacting the staffing company, using a false identity, and falsely requesting the placement of temporary employees. The staffing agency, believing that these temporary workers were actually working at a company, issued checks to these employees for their services. But none of these alleged “employees” performed any work. Authorities say Ms. Dobson retrieved the checks from the staffing company and gave them to Mr. Reyes.

In a second similar scheme while working at another staffing company, he allegedly placed several temporary employees in different companies. One company did not exist. Work was never ordered or performed. As a result, Mr. Reyes' employer issued checks even though the workers did not exist. Authorities allege that Mr. Reyes stole $5,000 from that employer.

The grand jury returned the indictments on Oct. 20. Mr. Reyes is being held in federal prison on an unrelated matter. A warrant has been issued for Mr. Reyes' to appear in Suffolk Superior Court to be arraigned on these charges. Ms. Dobson and Ms. Colon are expected to be arraigned in Worcester Superior Court on Nov. 17.