Opinion
1:21-CR-00184 DAD-BAM
12-17-2021
UNITED STATES OF AMERICA, Plaintiff, v. DARYOL RICHMOND, aka “Nutcase, ” “Nuttcase, ” and “Nuttcase 3x, ” TELVIN BREAUX, aka “AJ” and “Lilcup, ” HOLLY WHITE, CECELIA ALLEN, aka “Cece” and “Cee Cee, ” FANTASIA BROWN, aka “Tay Tay, ” TONISHA BROWN, FANTESIA DAVIS, aka “Tesia, ” and SHANICE WHITE, Defendants.
PHILLIP A. TALBERT Acting United States Attorney JOSEPH D. BARTON Assistant U.S. Attorney
PHILLIP A. TALBERT Acting United States Attorney
JOSEPH D. BARTON Assistant U.S. Attorney
MOTION AND PROPOSED ORDER TO SEAL SUPERSEDING INDICTMENT
Barabara A. McAuliffe U.S. Magistrate Judge
The government moves the Court, pursuant to Rule 6(e) of the Federal Rules of Criminal Procedure, to order that the Superseding Indictment returned by the Grand Jury on December 16, 2021, charging the above defendants with violations of 18 U.S.C. § 1349 - Conspiracy to Commit Mail Fraud; 18 U.S.C. § 1028A(a)(1) - Aggravated Identity Theft; 18 U.S.C. §§ 1028A(a)(1) and 2 - Aggravated Identity Theft and Aiding and Abetting; and Criminal Forfeiture, be redacted and sealed so that the new defendants who were not charged in the initial indictment and are currently out of custody do not become aware of the indictment until they are either in custody or have been given bail. A copy of the redacted Superseding Indictment is attached to this Motion. The new defendants are: Cecelia Allen, Fantasia Brown, Tonisha Brown, Fentesia Davis, and Shanice White. The government also moves the Court to order that no one shall disclose the existence of the Superseding Indictment or any arrest warrants issued pursuant to the indictment as to the new defendants, except when necessary for execution of the warrants.
IT IS SO ORDERED.
REDACTED SUPERSEDING INDICTMENT
VIOLATIONS: 18 U.S.C. § 1349-Conspiracy to Commit Mail Fraud; 18U.S.C. § 1028A(a)(1)-Aggravated Identity Theft (Two Counts); 18 U.S.C. §§ 1028A(a)(1) and 2 - Aggravated Identity Theft and Aiding and Abetting (Five Counts); 18 U.S.C. § 981(a)(1)(C), and 28 U.S.C. § 2461(C) - Criminal Forfeiture
SUPERSEDING INDICTMENT
COUNT ONE: [18 U.S.C. § 1349 - Conspiracy to Commit Mail Fraud]
The Grand Jury charges:
DARYOL RICHMOND, aka "Nutcase," "Nuttcase," and "Nuttcase 3x," TELVTN BREAUX, aka "AJ" and "Lilcup," [XXXXX] HOLLY WHITE, Defendants herein, as follows:
I. INTRODUCTION
At all relevant times:
1. Defendant TELVIN BREAUX was an inmate at the California Department of Corrections and Rehabilitation's (“CDCR”) California Correctional Institution, which is located in Tehachapi, California, in the State and Eastern District of California.
2. Defendant DARYOL RICHMOND was an inmate at the CDCR's Kern Valley State Prison, which is located in Delano, California, in the State and Eastern District of California.
3. Defendants HOLLY WHITE, [XXXXX] were known to defendants BREAUX and RICHMOND, and each other, and resided in the Southern California area.
4. “J-Pay” was a prison-based email service provider that allowed inmates and non-inmates to setup accounts and email each other for a fee.
II. BACKGROUND ON CALIFORNIA'S UNEMPLOYMENT INSURANCE SYSTEM
5. The Social Security Act of 1935 established the Federal and State Unemployment Insurance System, which provides benefits to persons who are out of work through no fault of their own. Unemployment insurance benefits are funded by a combination of federal and state funds.
6. The California Employment Development Department (“EDD”) administers the unemployment insurance system for the State of California.
7. Generally speaking, before March 2020, only individuals who were wage earners were eligible to receive unemployment insurance benefits and the benefits were for a limited period and capped at a certain amount. Self-employed individuals were ineligible. Beginning in March 2020, however, federal legislation made significant changes to the unemployment insurance system in response to the Coronavirus Disease 2019 (“COVID-19”) pandemic, including:
a. Making individuals who were self-employed eligible;
b. Extending the duration of the benefits period; and
c. Increasing the amount of benefits that could be paid out to individuals.
8. Overall, more than $300 billion in additional federal funds have been appropriated for unemployment insurance benefits during the COVID-19 pandemic.
9. An individual may apply to the EDD for unemployment insurance benefits by submitting a claim in-person, over the telephone, by mail, or online, and the claim can be paid retroactively to the date the individual became unemployed. The individual is asked to provide his or her true name, date of birth, and Social Security No. (“SSN”). The individual is also asked several questions to establish his or her eligibility for benefits, including what is his or her normal occupation, what was his or her last day worked and whether he or she recently became unemployed, and whether he or she is currently available to work. Finally, the individual is asked to provide his or her mailing address, email account, and telephone number, among other information.
10. After the EDD approves an individual's unemployment insurance claim, the benefits are paid bi-weekly. The benefits may be deposited onto a debit card that is issued by the Bank of America and mailed to the individual through the United States mail. The EDD then requires that the individual submit bi-weekly certifications to confirm that he or she is still looking for work and has not refused any work to continue receiving the benefits. The certification can be submitted in-person, over the telephone, by mail, or online.
III. CONSPIRACY
11. Beginning on a date unknown to the Grand Jury, but not later than in or around June 2020, and continuing until at least in or around December 2020, in the State and Eastern District of California and elsewhere, defendants RICHMOND, BREAUX, HOLLY WHITE, [XXXXX], and others known and unknown to the Grand Jury, did knowingly conspire to defraud the EDD and the United States, and to obtain money and property from the EDD and the United States, by means of materially false and fraudulent pretenses, promises, and representations, and to cause mail matter to be placed into a post office or other authorized depository for mail matter, and to be sent and delivered by the United States Postal Service according to the direction thereon, all in violation of Title 18, United States Code, Section 1341.
IV. MANNER AND MEANS OF THE CONSPIRACY
12. Defendants RICHMOND, BREAUX, HOLLY WHITE, [XXXXX], and others known and unknown to the Grand Jury, carried out the conspiracy by the following manner, means, and acts, among others:
13. Defendants RICHMOND and BREAUX used jails calls, J-Pay emails, and contraband cell phones to communicate with the other defendants from prison.
14. The defendants obtained the names, dates of birth, and SSNs for inmates who were incarcerated in prisons, non-inmates who did not know the defendants or authorize them to possess their personal information, and minor children. The defendants subsequently exchanged this information with each other and caused over 400 false and fraudulent unemployment insurance claims to be submitted online to the EDD in these individuals' identities. This included the identities of inmates H.H., J.C., A.P., non-inmates C.W.M., G.J., and Y.J., and the minor child K.S.
15. The defendants caused different mailing addresses and fictitious email accounts to be provided to the EDD for the false and fraudulent claims to try to avoid detection by government authorities. At times, they paid family members and associates to allow those family members and associates' physical addresses to be used for the claims and to create the email accounts.
16. The defendants caused the underlying applications for the claims to contain numerous false and fraudulent representations, including that the defendants submitting the claims were the identified individuals, that those individuals were previously self-employed forty or more hours per week as clothing merchants, handymen, mechanics, and other occupations in the Southern California area, that the individuals last worked within the prior few weeks or months and recently became unemployed because of the COVID-19 pandemic, and that the individuals were available to work.
17. For example, in the application that the defendants caused to be submitted in inmate H.H.'s identity on or about July 26, 2020, they falsely and fraudulently represented that H.H. was applying for benefits, that H.H. was previously self-employed forty hours per week as a handyman in San Bernardino County, California, that H.H. last worked in July 2020 and recently became unemployed because of social distancing and lockdown measures implemented to fight the COVID-19 pandemic, and that H.H. was looking for work. As the defendants were aware, these representations were not true and H.H. had been incarcerated at all times since the early 2000s.
18. As another example, in the application that the defendants caused to be submitted in C.W.M.'s identity on or about July 20, 2020, they falsely and fraudulently represented that C.W.M. was applying for benefits, that C.W.M. was previously self-employed forty hours per week selling merchandise to clothing stores and boutiques in Los Angeles County, California, that C.W.M. last worked in July 2020 and recently became unemployed due to COVID-19, and that C.W.M. was looking for work. As the defendants were aware, these representations were not true and they used C.W.M.'s identity without C.W.M.'s knowledge or authorization.
19. In the application that the defendants submitted for the minor child K.S. on or about August 1, 2020, they falsely and fraudulently represented that the application was being submitted by K.S., that K.S. was previously self-employed forty hours per week selling merchandise to clothing stores and boutiques in Riverside County, California, that K.S. last worked in July 2020 and recently became unemployed because of quarantine requirements implemented to fight the COVID-19 pandemic, and that K.S. was looking for work. As the defendants were aware, these representations were not true and K.S. was under the age of five at that time.
20. The defendants frequently caused the applications to falsely and fraudulently represent that the individuals in whose names they submitted the claims had access and control over the mailing addresses, email accounts, and telephone No. listed in the applications, when in fact the defendants retained access and control over such addresses, accounts, and numbers.
21. The defendants knew at the time they submitted the applications to the EDD that the applications contained false and fraudulent representations.
22. The defendants' false and fraudulent representations to the EDD were material to the agency's decisions to approve the unemployment insurance claims. The agency may deny a claim if the identified individual did not authorize the claim, did not previously work in California within a proscribed period or recently become unemployed because of the COVID-19 pandemic, or is not currently available to work, including because the individual is an incarcerated prisoner or a minor child. The agency may also deny a claim if the identified individual does not have access or control over the listed mailing address, email account, or telephone number.
23. The defendants' false and fraudulent representations caused the EDD to deposit benefits onto debit cards that were issued by the Bank of America and sent through the United States mail to addresses over which the defendants had access and control. The defendants who were not incarcerated, and the defendants' family members and associates, then picked up the debit cards and used them to make cash withdrawals in furtherance of the conspiracy. To further avoid detection by government authorities, the defendants frequently made the cash withdrawals at different locations, on different days and times, and in varying amounts.
24. Defendants RICHMOND and BREAUX typically instructed the other defendants on how and when to distribute the proceeds of the scheme. At times, the defendants caused the proceeds from the scheme to be stored in safe deposit boxes and to be transferred to various individuals, including amongst the defendants, through computer applications like Cash App and Zelle.
25. The defendants periodically checked the status of the fraudulent unemployment insurance claims with the EDD to see whether continuing certifications of eligibility were required to be submitted to continue receiving the benefits. When EDD required such certifications, the defendants caused false and fraudulent certifications of eligibility to be submitted to EDD, causing EDD to continue authorizing benefit payments on the claims.
26. At times, when the debit cards for certain claims were frozen for suspected fraud, defendants BREAUX, [XXXXX] called the EDD and Bank of America and impersonated the identified individuals in attempts to unfreeze the debit cards.
27. As a result of the conspiracy, the defendants, and others known and unknown to the Grand Jury, caused fraudulent unemployment insurance claims to be submitted to the EDD in excess of $25,000,000, and caused the EDD and the United States to incur more than $5,000,000 in actual losses. The defendants used the proceeds of the scheme for their own benefit and the benefit of others who were not entitled to such funds, including to purchase vehicles, furniture, handbags, and jewelry.
28. In carrying out the conspiracy, the defendants acted at all times with the intent to defraud.
All in violation of Title 18, United States Code, Section 1349.
COUNTS TWO AND THREE: [18 U.S.C. § 1028A(a)(1) - Aggravated Identity Theft]
The Grand Jury further charges:
DARYOL RICHMOND, aka “Nutcase, ” “Nuttcase, ” and “Nuttcase 3x, ” and TELVIN BREAUX, aka “AJ” and “Lilcup, ” Defendants herein, as follows:
29. Paragraphs 1 through 10 and 12 through 28 are incorporated by reference as though they are folly set forth herein.
30. The term "means of identification" means any name or No. that may be used, alone or in conjunction with any other information, to identify a specific individual, including any name, date of birth, SSN, unique electronic identification number, or routing code.
31. On or about the dates set forth below, in the State and Eastern District of California, defendants RICHMOND and BREAUX did knowingly transfer, use, and possess the means of identification of another person without lawful authority, to wit: they knowingly transferred, used, and possessed the means of identification of H.H. and J.C., including H.H. and J.C.'s names, dates of birth, and SSNs, during and in relation to an unlawful activity that constitutes a violation of federal law, to wit: conspiracy to commit mail fraud in violation of Title 18, United States Code, Section 1349, as follows:
COUNT
DATE
PERSON
MEANS OF IDENTIFICATION
CORRESPONDING COUNT
TWO
7/25/20
H.H.
H.H.'s name, date of birth, and SSN transmitted from RICHMOND to BREAUX for the purpose of submitting a fraudulent unemployment insurance claim in H.H.'s identity, which was submitted on or about July 26, 2020
ONE
THREE
7/27/20
J.C.
J.C.'s name, date of birth, and J.C. SSN transmitted from RICHMOND to BREAUX for the purpose of submitting a fraudulent unemployment insurance claim in J.C.'s identity, which was submitted on or about August 1, 2020
ONE
All in violation of Title 18, United States Code, Section 1028A(a)(1).
COUNT FOUR: [18 U.S.C. §§ 1028A(a)(1) and 2 - Aggravated Identity Theft and Aiding and Abetting]
[XXXXX]
32. [XXXXX]
COUNTS FIVE AND SIX: [18 U.S.C. §§ 1028A(a)(1) and 2 - Aggravated Identity Theft and Aiding and Abetting]
[XXXXX]
[XXXXX]
COUNTS SEVEN AND EIGHT: [18 U.S.C. §§ 1028A(a)(1) and 2 - Aggravated Identity Theft and Aiding and Abetting]
The Grand Jury further charges:
HOLLY WHITE and [XXXXX] Defendants herein, as follows:
36. Paragraphs 1 through 10, 12 through 28, and 30 are incorporated by reference as though they are fully set forth herein.
37. On or about the dates set forth below, in the State and Eastern District of California and elsewhere, defendants HOLLY WHITE and [XXXXX] did knowingly transfer, use, and possess the means of identification of another person without lawful authority, and aided and abetted such conduct, to wit: the defendants knowingly transferred, used, and possesses the means of identification of G.J. and Y.J., including then names, dates of birth, and SSNs, and aided and abetted such conduct, during and in relation to an unlawful activity that constitutes a violation of federal law, to wit: conspiracy to commit mail fraud in violation of Title 18, United States Code, Section 1349, as follows:
COUNT
DATE
PERSON
MEANS OF IDENTIFICATION
CORRESPONDING COUNT
SEVEN
8/6/20-8/8/20
G.J.
G.J.'s name, date of birth, and SSN transmitted from [XXXXX] to BREAUX and then to HOLLY WHITE for the purpose of submitting a fraudulent unemployment insurance claim in G.J.'s identity and creating the email account used for the claim, which was submitted on or about August 9, 2020
ONE
EIGHT
8/6/20-8/8/20
Y.J.
Y.J.'s name, date of birth, and SSN transmitted from [XXXXX] to BREAUX and then to HOLLY WHITE for the purpose of submitting a fraudulent unemployment insurance claim in Y.J.'s identity and creating the account used for the claim, which was submitted on or about August 9, 2020
ONE
All in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2. FORFEITURE ALLEGATION: [18 U.S.C. § 981(a)(1)(C), 28 U.S.C. § 2461(c) - Criminal Forfeiture]
38. Upon conviction of one or more of the offenses alleged in Counts One through Eight of this Indictment, the defendants shall forfeit to the United States, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), all property, real and personal, which constitutes or is derived from proceeds traceable to such violations, including:
a. A siun of money equal to the amount of proceeds traceable to such offenses for which defendants are convicted.
39. If any property subject to forfeiture as a result of the offenses alleged in Counts One through Eight of this Indictment for which defendants are convicted:
a. cannot be located upon the exercise of due diligence,
b. has been transferred or sold to, or deposited with, a third party,
c. has been placed beyond the jurisdiction of the court,
d. has been substantially diminished in value, or e. has been commingled with other property which cannot be divided without difficulty, it is the intent of the United States, pursuant to 28 U.S.C. § 2461(c), incorporating 21 U.S.C. § 853(p), to seek forfeiture of any other property of said defendant, up to the value of the property subject to forfeiture.
PHILLIP A. TALBERT Acting United States Attorney
KIRK E. SHERRIFF Chief, Fresno Office Assistant United States Attorney
SUPERSEDING INDICTMENT
VIOLATION(S): 18 U.S.C. § 1349 - Conspiracy to Commit Mail Fraud; 18 U.S.C. § 1028A(a)(1) -Aggravated Identity Theft (Two Counts); 18 U.S.C. §§ 1028A(a)(1) and 2 - Aggravated Identity Theft and Aiding and Abetting (Five Counts); 18 U.S.C. § 981(a)(1)(C), and 28 U.S.C. § 2461(C) - Criminal Forfeiture
COUNT ONE:
VIOLATION: 18 U.S.C. § 1349 - Conspiracy to Commit Mail Fraud
PENALTIES: Up to twenty years imprisonment
Up to $250,000 fine
Up to three years supervised release
$100 special assessment
COUNTS TWO AND THREE:
VIOLATION: 18 U.S.C. §§ 1028A(a)(1) - Aggravated Identity Theft and Aiding and
Abetting
PENALTIES: Mandatory two years imprisonment consecutive to other counts
Up to $250,000 fine
Up to three years supervised release
$100 special assessment
FORFEITURE ALLEGATION:
As stated in the charging document
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