Center Point man sentenced to 5 months for unemployment funds scam

CEDAR RAPIDS — A Center Point man who filed false unemployment claims in New York and Maine to illegally obtain an additional $600 weekly coronavirus benefit was sentenced this week to five months in prison and ordered to pay nearly $17,000 in restitution.

Larry Neal Wells, 63, pleaded in April in U.S. District Court to one count of wire fraud.

According to a plea agreement, Wells opened checking accounts at Cedar Rapids and Hiawatha banks to use in the scheme to defraud by sending his account information to others who participated and benefited from the scheme.

On May 22 of last year, an unemployment claim was filed in the name of “R.B.,” as identified in documents, but a checking account for Wells was listed in the direct deposit information on the claim, the plea stated. On June 1, Wells received two deposits into his account from the Maine Department of Labor.

The plea agreement gives examples of Wells receiving the fraudulent unemployment benefits from Maine and New York in his Cedar Rapids and Hiawatha bank accounts and his cash withdrawals after those deposits.

A banker at the Hiawatha location contacted Wells and confronted him June 12 about the previous week’s activity, the plea stated.

The banker told investigators that Wells had fallen for “romance scams” in the past, according to the plea. The banker “admonished” Wells and explained the concept of these scams. Wells told the banker a woman had sent him checks and he sent her gift cards. Wells also admitted he had provided his girlfriend with his bank login information.

During the week after this conversation, Wells continued his activity with the Cedar Rapids bank by withdrawing unemployment funds he received from New York, the plea stated.

When federal agents interviewed Wells on Aug. 31 of last year, he admitted that he never worked in New York or Maine, according to the plea. Wells said he had a girlfriend he met online, “M.W.B.,” as identified in documents, and she encouraged him to open those two bank accounts. Wells admitted he knew the money was sent to him in error and he should have let the bank send it back.

The plea includes communications between this “girlfriend” and Wells on Facebook. They wrote, sometimes in “code,” about the funds sent to his accounts and banks watching for unusual activity because of these schemes. Wells informed her that police wanted to talk to him about the schemes, and the woman said it’s good they did not have Wells’ “real” address.

Wells received a total of $16,978 in unemployment benefits from New York and Maine, according to court documents. He would withdraw the cash, keep some for himself and mail the rest to other individuals.

U.S. District Judge C.J. Williams ordered Wells to pay $7,728 in restitution to the New York State Department of Labor and $9,250 in restitution to the Maine Department of Labor. Wells also must serve five years of supervised release following his prison term.

The case was prosecuted by Assistant U.S. Attorney Kyndra Lundquist and investigated by the FBI and the U.S. Department of Labor Office of Inspector General.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the U.S. Department of Justice’s National Center for Disaster Fraud Hotline at (866)-720-5721 or by center’s complaint form.

Comments: (319) 398-8318; trish.mehaffey@thegazette.com