Newark Family Charged With Leading $2 Million Unemployment Fraud Schemes

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TRENTON – Five members of a Newark family have been indicted for rolls in alleged schemes to defraud the state of more than $2 million by filing false claims for unemployment benefits, Attorney General Jeffrey S. Chiesa and Labor Commissioner Harold J. Wirths announced today.

The charges stem from “Operation Labor Day,” a joint investigation by the New Jersey Division of Criminal Justice and the New Jersey Department of Labor & Workforce Development.

The Division of Criminal Justice obtained state grand jury indictments – returned on March 1, but sealed until late yesterday – charging these five defendants who allegedly led the criminal schemes:

  • Terry E. Dilligard II, 35, of Newark;
  • Janice Allen, 55, of Newark, his mother;
  • Janice Dilligard, 35, of Newark, his twin sister;
  • Monique Valentine, 33, of Roselle, his former girlfriend and the mother of his children; and
  • Terry Dilligard Sr., 57, of DeLand, Florida, his father.

All five of these defendants face second-degree charges, including counts of theft by deception and conspiracy, which carry a sentence of five to 10 years in state prison. In addition, Terry Dilligard II is charged with first-degree money laundering, which carries a sentence of 10 to 20 years in prison.

These five individuals and 26 other defendants are charged with filing false unemployment insurance claims with the Department of Labor between August 2006 and November 2010 which resulted in the theft of more than $2 million in unemployment benefits. The claims were based upon fictitious assertions of previous employment held by the claimants, primarily with the University of Medicine and Dentistry of New Jersey, Newark Beth Israel Hospital and two private employers, authorities said.

“This is an outrageous case of fraud and greed that revolves around members of a Newark family who allegedly orchestrated schemes to steal over $2 million from the state’s unemployment insurance fund,” said Chiesa. “In this tough economy, unemployment benefits are a financial lifeline for hardworking New Jersey residents who have lost their jobs, and we cannot afford to have them drained by con artists. We will aggressively prosecute such crimes.”

“It’s harder to retrieve money once it’s out the door. We are now preventing fraud before it happens, and if catch people collecting unemployment when they shouldn’t, we will go after them,” said Commissioner Wirths. “My goal is to protect the Unemployment Insurance Fund for those people who paid into it and, because they fell on hard times, need the safety net it provides. Those who would illegally deplete it will go to prison.”

Arrest warrants were issued for 26 defendants. Yesterday, detectives, investigators and agents of the cooperating law enforcement agencies arrested more than a dozen of the wanted individuals, including Janice Dilligard, Valentine and Allen. Terry Dilligard II remained a fugitive sought on the state’s arrest warrant. Most of those arrested were lodged in the Mercer County Jail.

One indictment announced today charges Dilligard II, his ex-girlfriend, Valentine, and his father, Dilligard Sr., with defrauding the State of New Jersey of a total of $1,489,411 in unemployment benefits. Dilligard II and his father are charged with stealing $174,848 of that total by filing claims using identities stolen from nine voters in Florida.

Dilligard Sr., who was a city commissioner in Florida, allegedly obtained their personal information, including Social Security numbers and dates of birth, while registering voters. The son allegedly paid the father a share of the benefits that were fraudulently obtained. They are charged with second-degree identify theft for that alleged conduct.

The son is charged alone with stealing another $810,345 of the total covered by that indictment, and he and Valentine are charged together with stealing $478,768. Valentine is charged alone with stealing $25,450. Dilligard II and Valentine allegedly filed false claims in the names of numerous individuals. Twenty-one of those individuals are charged in 21 separate indictments with filing or allowing Dilligard II to file false claims in their names and sharing the stolen benefits with him.

A separate indictment unsealed yesterday charges Janice Dilligard and her mother, Janice Allen, with stealing $585,304 in unemployment benefits by filing false claims in the names of numerous claimants, including relatives and people who were deceased. Their alleged conspiracy was separate from the conspiracies of Terry Dilligard II, Dilligard Sr. and Valentine. Five other defendants were also named in the indictment charging the mother and daughter; they allegedly assisted the two women in the fraud and shared in the stolen unemployment benefits. Each of the five is charged with second-degree conspiracy and third-degree theft by unlawful taking.

In many instances, individual false claims allegedly filed by the defendants would generate tens of thousands of dollars in benefits. Benefit amounts on a single claim reached as high as $56,915. The two main indictments combined allege a total of $2,074,715 in stolen benefits.

“This was a complex case involving numerous conspirators and extensive financial evidence that had to be tied together,” said Stephen J. Taylor, Director of the Division of Criminal Justice. “Our Labor Prosecutions Unit and the Department of Labor conducted a very skillful and thorough investigation. We will continue this partnership to protect the integrity of the unemployment insurance program.”

The Department of Labor & Workforce Development has implemented the following anti-fraud measures since the alleged criminal conduct in this case occurred:

  • Replaced paper checks with Debit Cards to distribute benefits more securely and at a cost savings.
  • Created a new Anti-Fraud unit headed by former FBI agent to improve fraud detection.
  • Enlisted and continue to deploy new software to detect and thwart fraud practices, such as those used in this case and other schemes.
  • Implemented a cross-checking program by which unemployment insurance recipients are matched against national and state “new hire” data to thwart the most common fraud, which is people collecting UI after they have found employment. An estimated $100 million has been saved since March 2011 through this effort, and the U.S. Department of Labor issued two national innovation awards to New Jersey for this anti-fraud effort.

The indictments are merely accusations and the defendants are presumed innocent until proven guilty.

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