Marion man sentenced to 9 months for unemployment scheme

CEDAR RAPIDS — A Marion man was sentenced this week to nine months in federal prison for receiving over $13,000 in coronavirus unemployment funds that he wasn’t entitled to from the state of Arizona.

Brian Lynn Whorton, 55, pleaded guilty to one count of wire fraud in January.

Whorton would receive the fraudulent unemployment funds from Arizona, make a cash withdrawal and then transfer a portion to a Bitcoin ATM to send funds to other participants in the scheme.

He kept some of the funds for himself, according to information at sentencing and a criminal complaint. The Arizona unemployment deposits went into Whorton's checking account that he had at a Marion bank.

A fraud specialist with the bank discovered the suspicious deposits from Arizona and noted the deposits were followed by cash withdrawals.

The complaint provided examples from a June 8 deposit of $6,570 from the state of Arizona into Whorton's account, two check withdrawals of $5,000 and $3,500 on June 9 and 11, and a $7,170 deposit from Arizona on June 15.

According to the affidavit, there were two applications for unemployment for “Brian Horton,” each with different addresses in Arizona and different identification information. The direct deposits went into Whorton's account.

The fraud specialist called Whorton about the activity. Whorton said he received the funds as an inheritance from his uncle, who had died.

The bank contacted Whorton's uncle, who also is a customer, and confirmed the uncle was alive.

Court documents stated the bank closed Whorton's previous account because of fraudulent activity in February. Whorton admitted he shared his account number and other information with “some friends.”

When authorities interviewed him, Whorton said he had been a victim of a “romance scam,” which caused the bank to close his previous account. He said he had been talking to woman — his contact in the scheme — online.

Whorton said up until then he believed he was receiving inheritance money from the father of the woman who he was communicating with online.

Whorton also admitted giving the woman his banking information, according to the affidavit. The woman told him to send her most of the money and take a 'little for himself.”

After receiving funds, he withdrew money as cash and sent $2,500 to the woman using a Bitcoin ATM at Jim's Foods in Cedar Rapids. He then kept the remaining cash.

Investigators discovered Whorton had been communicating with the woman since February 2019, which was six months earlier than he told investigators.

U.S. District Judge C.J. Williamsordered Whorton to pay $13,740 in restitution to the Arizona Department of Economic Security. He also must serve two years of supervised release following his prison term.

Whorton must report to the U.S. Marshals Service Sept. 10 and be transferred to prison.

This 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 the pandemic or unemployment benefits can report it by calling the U.S. Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via an online complaint form.

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