Unemployment Fraud: Nigerian accused of $10m US benefits theft

A Nigerian man, Yomi Olayeye, has been arrested and charged with conspiracy, wire fraud, and identity theft in connection with a $10 million pandemic unemployment assistance fraud scheme in the United States.

The U.S. Attorney’s Office for the District of Massachusetts revealed this in a statement on August 19, 2024.

The statement said:

“A Nigerian man was arrested on Aug. 13, 2024, upon arriving at John F. Kennedy International Airport in New York City…

“On charges that he and others conspired to fraudulently obtain at least $10 million in COVID-19 unemployment benefits.”

Yomi Jones Olayeye, also known as “Sabbie,” 40, of Lagos, Nigeria, faces multiple charges.

These include one count of wire fraud conspiracy, one count of wire fraud, and one count of aggravated identity theft.

The charging documents allege that between March and July 2020, Olayeye and his co-conspirators defrauded three pandemic assistance programs.

These programs include traditional unemployment insurance (UI), Pandemic Unemployment Assistance (PUA), and Federal Pandemic Unemployment Compensation (FPUC).

They were administered by the Massachusetts Department of Unemployment Assistance and other states’ unemployment insurance agencies.

The statement continued:

“In total, Olayeye and his co-conspirators allegedly applied for at least $10 million in fraudulent UI, PUA, and FPUC…

“From Massachusetts, Hawaii, Indiana, Michigan, Pennsylvania, Montana, Maine, Ohio, and Washington…

“And received more than $1.5 million in assistance to which they were not entitled.”

Olayeye and associates allegedly used stolen personally identifiable information PII from criminal forums to fraudulently apply for benefits.

They allegedly opened U.S. bank accounts to receive payments and recruited account holders to transfer proceeds via cash apps.

According to the U.S. Department of Justice, if convicted, Olayeye faces 20 years in prison for the wire fraud charges.

He also faces a mandatory two-year sentence for aggravated identity theft, alongside fines and restitution.

Background on COVID-19 pandemic assistance programs

The COVID-19 pandemic prompted rapid unemployment programs under the CARES Act to support those affected by the economic downturn.

These programs included:

Unemployment Insurance (UI): A traditional program providing benefits to workers who lost their jobs through no fault of their own.

Pandemic Unemployment Assistance (PUA): Expanded coverage to include self-employed workers, gig workers, and others not traditionally covered by UI.

PUA was crucial for those ineligible for standard UI benefits.

Federal Pandemic Unemployment Compensation (FPUC): Provided an additional $600 per week to individuals receiving UI or PUA benefits.

These programs aimed to provide financial relief to those who lost income during the pandemic, helping them meet basic needs.

Impact of the unemployment fraud

Fraudulent activities like those alleged against Olayeye have had significant impacts on the U.S. economy and the effectiveness of pandemic assistance programs.

The Government Accountability Office (GAO) estimates that fraud in pandemic unemployment programs caused losses between $100 billion and $135 billion.

This strained resources meant for those genuinely in need, leading to delays and reduced benefits for many eligible recipients.

As a result, the hardships they faced during the pandemic were exacerbated.

History of similar cases

Fraudulent activities targeting pandemic assistance programs have been widespread.

For example, similar cases involving Nigerian nationals include schemes where fraudsters filed hundreds of false claims using stolen identities.

A notable instance is the case of Abidemi Rufai, a a Nigerian citizen and former Special Assistant to the Governor of Ogun State, Nigeria.

The U.S authorities arrested Rufai in May 2021 at JFK Airport in New York, and he later pled guilty to wire fraud and aggravated identity theft.

Since 2017, Rufai had stolen the identities of over 20,000 Americans.

He submitted fraudulent claims for more than $2 million across various relief programs, including COVID-19 pandemic unemployment benefits.

His actions caused over $600,000 in fraudulent payments, hitting the Washington State Employment Security Department the hardest.

Rufai also attempted to defraud the Small Business Administration through fraudulent Economic Injury Disaster Loan (EIDL) applications.

He had a history of filing false tax returns and disaster relief claims, dating back to Hurricane Harvey and Hurricane Irma.

These cases expose system vulnerabilities in crisis aid and stress the need for stronger fraud prevention in future programs.

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