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New York State Department of Labor

New York State Department of Labor Announces Sentencing of Florida Man Convicted
of Unemployment Insurance Fraud Victimizing New Yorkers

Accountable for More Than $200K in Fraud
Federal Inquiry Stemmed from New York State Department of Labor Investigators’ Discovery

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Albany, NY (March 12, 2015) -

New York State Department of Labor Acting Commissioner Mario J. Musolino announced that Reginald Steele-Nelson, 28, of Miami, Florida was sentenced yesterday to 96 months in prison to be followed by 3 years of supervised release following his conviction on charges involving identity theft and fraud against numerous state benefit programs in multiple states, including New York. Mr. Steele-Nelson gained access to more than $1.1M in benefits, ultimately stealing $236,371.45 before he was apprehended. His sentence is one of the most severe for a crime of this kind in a case stemming from a New York State Department of Labor investigation.

Mr. Steele-Nelson was accused of stealing nine New Yorkers' identities and claiming $4,500, but by halting this scheme, investigators saved New York State nearly $100,000.

"I commend the Department of Labor's Office of Special Investigations, which continues to display extraordinary diligence in curtailing criminal activity of this kind," said Acting Commissioner Musolino. "Due to early detection by New York State Department of Labor investigators, the expense to New York State was not as extreme as that of other states in this case."

By using new technology and engaging in aggressive analysis of potential fraud, Department investigators were able to detect and halt Mr. Steele-Nelson's actions in the state early in the process. Once the New York State Department of Labor alerted federal authorities, similar and eventually far more costly theft was discovered in other states.

New York State Department of Labor Major Case Unit investigators identified an IP address registered to Mr. Steele-Nelson from which multiple false claims for Unemployment Insurance benefits were filed. The agency's Major Case Unit worked with federal authorities to expand the investigation. The federal authorities discovered that between December, 2013 and the summer of 2014, Mr. Steele-Nelson claimed the Unemployment Insurance benefits of more than 90 individuals from whom he stole personal identifying information, including names and social security numbers.

In addition to committing Unemployment Insurance fraud in New York, Florida and Massachusetts, Mr. Steele-Nelson used a "skimmer" device to create fake credit and debit cards. Additionally, he filed fraudulent Social Security claims and redirected legitimate Social Security claims from their intended recipients to his personal accounts. In total, Mr. Steele-Nelson was found accountable for more than $230,000 in loss.

With the cooperation and assistance of Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Brian McGlamery, Acting Special Agent in Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Thomas Caul, Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), Jesse Panuccio, Executive Director, State of Florida Department of Economic Opportunity, and J. Scott Dennis, Chief, North Miami Beach Police Department, Mr. Steele-Nelson pled guilty to one count of use of one or more unauthorized access devices to obtain $1,000 in value or more during one calendar year, one count of possession of fifteen or more unauthorized access devices, one count of possession of device making equipment, and three counts of aggravated identity theft.

Restitution in the full amount of actual loss, $236,371.45, was ordered by U.S. District Judge Kathleen M. Williams without the need for a restitution hearing.

The New York State Department of Labor operates one of the largest Unemployment Insurance systems in the country. In addition to administering the entire system, the Department of Labor is responsible for preventing and stopping fraud and ensuring the integrity of the Unemployment Insurance Trust Fund. When the Trust Fund is forced to pay out because of a fraudulent claim, employers have to pay more -- and that means consumers will pay more as well. It is in everyone's best interest to stop Unemployment Insurance fraud.

The state is a national leader in the prevention and investigation of Unemployment Insurance benefits fraud. In 2012, New York State was selected to create a single Unemployment Insurance National Integrity Center of Excellence by the United States Department of Labor. The Center is identifying, developing and piloting new strategies and tools to combat improper payment and fraud on a national level.

Anyone with information about possible Unemployment Insurance fraud should call the Department of Labor's anonymous toll-free fraud hotline at (888) 598-2077 or visit www.labor.ny.gov/fraud.


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