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Oct. 19, 2021

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Former Employment Security Department worker charged with stealing unemployment funds, bribery, extortion

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A former employee with the state Employment Security Department was arrested Friday and charged with defrauding the government of at least $360,000 in jobless benefits, the U.S. Attorney’s Office in Seattle said Friday.

Reyes De La Cruz, III, 47, of Moses Lake is accused in a 20-count federal indictment of exploiting his job at the unemployment benefits agency to steal public money amid the COVID-19 pandemic’s surge of jobless claims last year. De La Cruz allegedly enriched himself by at least $130,000 and arranged tens of thousands in improper payments for family, friends and acquaintances, according to a news release from the office of acting U.S. Attorney Tessa M. Gorman.

According to the indictment, De La Cruz had been hired as an intake agent by ESD in April 2020, as the agency brought in a mass of additional workers to handle an unprecedented volume of unemployment claims. He had previously worked for ESD from 1996 to 2003, the U.S. Attorney’s Office said.

In his six-month stint with ESD last year, De La Cruz used his position to steal public money with a scheme that included kickbacks, threats and identity theft, according to the indictment unsealed Friday.

“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,” Gorman said in a statement.

In some cases, the indictment says, De La Cruz used personal information of other persons to file fraudulent claims in their names and have the payments loaded onto debit cards and sent to himself.

In others, he allegedly used his access to ESD’s claims database to approve claims for people he knew — while demanding a cut of the payments for himself.

He spelled out the quid pro quo in Facebook messages obtained by federal investigators, according to prosecutors.

‘I help you, you help me’

“So I am doing this and helping you guys get a big amount of money that otherwise would not be obt ainable [sic]. So I am asking for a percentage of the benefits. I help you, you help me,” De La Cruz wrote in one message last August, asking for a $2,000 cut of the $10,000 in benefits.

In at least two instances, when people resisted paying him, De La Cruz “threatened to alter their claims so they would no longer receive the benefits,” the indictment states. He accepted about $21,000 in kickbacks from claimants in exchange for ensuring their benefits were approved.

Even after he was fired in October, De La Cruz continued to try to restart some fraudulent claims, going so far as to impersonate a claimant in recorded phone calls with ESD and a bank, according to the news release.

De La Cruz was arrested in Moses Lake on Friday morning and is scheduled to make his first court appearance on Monday in Spokane. He will appear later in U.S. District Court in Tacoma, where the case is filed, the U.S. Attorney’s Office said.

He is charged with six counts of wire fraud, nine counts of bribery, one count of extortion by a public official and four counts of aggravated identity theft. It was not immediately clear whether an attorney had been appointed to defend De La Cruz.

The charges carry potential sentences of decades in prison.

ESD uncovered evidence of the fraud, fired De La Cruz and referred the case to the Department of Labor Office of Inspector General, according to the U.S. Attorney’s Office. The FBI joined the investigation, and the Moses Lake Police Department and state Department of Corrections assisted in Friday’s arrest.

In a statement, ESD Commissioner Cami Feek said the department “has zero tolerance for theft and fraud of any kind. After becoming aware of the situation, we took immediate action by separating the employee, notifying the state auditor and referring the case to law enforcement.”

The alleged theft by an ESD employee was first made public this spring in the state’s audit of the massive fraud that siphoned of $650 million in unemployment benefits.

While most of last year’s fraud had been tied to foreign cybercriminals, the auditor noted that one state employee was under criminal investigation for “potential misappropriation” of an undisclosed amount of unemployment benefits.

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