HSI Baltimore investigation lands Maryland man more than 4 years in federal prison for COVID-19 fraud scheme

BALTIMORE - An investigation conducted by Homeland Security Investigations (HSI) Baltimore field office; U.S. Postal Inspection Service (USPIS) Washington, D.C. division; U.S. Department of Labor - Office of Inspector General (DOL-OIG) National Capital region; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore field division; the Anne Arundel County Police Department; and the Maryland State Police (MSP) landed a Maryland man in federal prison for more than four years for his involvement in a COVID-19 fraud scheme. Dementrous Von Smith, 36, of Waldorf, Maryland, received a sentence of 53 months in federal prison, followed by three years of supervised release, Dec. 15, for a wire fraud conspiracy, wire fraud and aggravated identity theft, in relation to the submission of fraudulent CARES Act unemployment insurance claims in Maryland, California, and Arizona totaling at least $1.5 million.

“Dementrous Von Smith’s theft affected deserving people in three different states,” said HSI Baltimore Special Agent in Charge James C. Harris. “Smith stole more than a million dollars that should have gone to residents of Maryland, California, and Arizona, suffering from the economic decline caused by the COVID-19 pandemic, for that he will spend the next four and a half years in prison. We cannot allow thieves like Smith to take advantage of a global crisis for personal gain.”

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was a federal law enacted in March 2020 to provide emergency financial assistance to Americans affected by the economic effects caused by the COVID-19 pandemic. Financial assistance offered through the CARES Act also included expanded eligibility for Unemployment Insurance (UI) benefits and increased UI benefits through the Pandemic Unemployment Assistance Program, Federal Pandemic Unemployment Compensation, and the Lost Wages Assistance Program.

According to the investigation, from March 2020 until October 2021, Smith and his co-conspirators impersonated victims to submit fraudulent claims for unemployment insurance benefits in Maryland and California. As part of the scheme, Smith and his co-conspirators used electronic messages, phone calls, email, and other means to aggregate and exchange the personally identifiable information of identity theft victims with each other, created false email address and phone numbers for the victims, and used the fake emails and phone numbers in the fraudulent UI applications.

Once Smith and his co-conspirators received the fraudulently obtained benefits on debit cards, they used the cards for cash withdrawals and other financial transactions for their own benefit. In one instance in July 2021, Smith was seen on bank surveillance using ATMs in Laurel, Maryland, to withdraw $4,000 over four transactions, using the UI profile in the name of one of the identity theft victims. Bank records also reveal that Smith called the bank regarding at least 12 UI profiles of actual victims whose identities were used to open accounts and obtain benefits without their permission. These victims are tied to texts and calls between Smith and his co-conspirators over several months. Smith and his co-conspirators personally conducted or attempted to conduct transactions involving at least $1.5 million in UI benefits.

On July 7, 2022, law enforcement executed search warrants for Smith’s residence and vehicle, recovered, among other items, a 7.62 caliber firearm, a loaded 1911 style pistol, several magazines loaded with multiple rounds of various caliber ammunition, more than 176 rounds of various caliber ammunition, and $9,100 in cash.

Co-defendant Michael Akame Ngwese Ay Makoge, 28, of Laurel, Maryland, pleaded guilty to his role in the fraud scheme and faces a maximum sentence of 30 years in federal prison for the wire fraud conspiracy and a mandatory two years in federal prison, consecutive to any other sentence imposed, for aggravated identity theft. Makoge’s sentencing is scheduled for February 1, 2024.

This was a District of Maryland Strike Force operation. The District of Maryland Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the CARES Act. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

This case was investigated by HSI Baltimore; USPIS Washington, D.C.; DOL-OIG National Capital region; ATF Baltimore; the Anne Arundel County Police Department; and MSP with significant assistance from U.S. Marshals Service, the Prince George’s County Police Department, the Montgomery County Police Department, the Washington, D.C. Metropolitan Police Department, and the Charles County Sheriff’s Office. The case was prosecuted by the U.S. Attorney’s Office for the District of Maryland.

HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of more than 8,700 employees consists of more than 6,000 special agents assigned to 237 cities throughout the United States, and 93 overseas locations in 56 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.

Source: U.S. Immigration and Customs Enforcement (ICE.gov)