Spouses plead guilty in $1 million insurance scam

Married couple scammed COVID unemployment insurance program, Amtrak

Spouses plead guilty in $1 million insurance scam

Insurance News

By Ryan Smith

A former Amtrak employee has pleaded guilty to conspiring with her husband to steal almost $1 million in COVID-19-related unemployment insurance benefits and for dishonestly obtaining more than $63,000 in sickness benefits.

Lizette Berrios Lathon, 45, of Moreno Valley, Calif., pleaded guilty to three counts including conspiracy to commit mail and wire fraud, aggravated identity theft, and wire fraud.

Her husband, Kenneth Andrew Lathon, pleaded guilty to charges of conspiracy to commit mail and wire fraud, aggravated identity theft, and unlawful possession of a firearm by a convicted felon. 

The Department of Justice said that from 2014 onward, Lizette Lathon operated at least three tax preparation businesses in addition to her job as an Amtrak service attendant. She and her husband used these businesses to take advantage of unemployment insurance benefits made possible through the CARES Act, which established a Pandemic Unemployment Assistance program that provided additional unemployment insurance during the pandemic, including to people who would not otherwise qualify for benefits, such as business owners and independent contractors.

According to the DOJ, Lizette Lathon submitted fraudulent applications to the California Employment Development Department (EDD) using names and personal information she got from former clients of her tax preparation business, without the knowledge or permission of those clients. She also inflated the income for the named claimants – many of whom did not live in California – in order to receive the maximum possible benefit.

As a result of these fraudulent claims, the EDD authorized Bank of America to issue debit cards for the named claimants. However, those cards were mailed to addresses controlled by Lizette Lathon and her family. Lizette and Kenneth Layton then used those cards to withdraw cash at ATMs and make purchases in retail stores, according to the DOJ.

During the course of the scam, which lasted from spring of 2020 until March of 2021, Lizette and Kenneth Lathon filed at least 44 phony claims, resulting in losses to the EDD and the US Treasury of around $998,630.

Lizette Lathon also used her position at Amtrak to scam the Railroad Retirement Board by filing phony claims stating that she was being treated for pain and anxiety. As a result of the scam, she stole about $63,000 in sickness pay benefits, the DOJ said.

The Lathons will be sentenced in April. Lizette Lathon faces up to 42 years in federal prison, while Kenneth Lathon faces a maximum of 32 years.

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