Paula Lane Sentenced for $150K Unemployment Fraud

Paula Lane, 47, a.k.a. Paula Hipps, of Danville, Virginia — formerly of Corapeake, North Carolina — is behind bars after being sentenced to 57 months in federal prison for a brazen unemployment insurance fraud scheme that ripped off over $150,000 from the Virginia Employment Commission (VEC) and similar agencies in Indiana and Pennsylvania.

Lane pleaded guilty on September 15, 2016, to mail fraud and aggravated identity theft. Federal prosecutors say she masterminded a year-long fraud operation between August 2013 and August 2014, creating fake companies from her North Carolina home and falsely reporting wages for 28 non-existent employees — all of whom were real people whose identities she stole.

Using those stolen identities, Lane filed false unemployment claims, directing benefits straight into bank accounts and onto prepaid debit cards under her control. The scam wasn’t limited to Virginia — she also submitted fraudulent claims in Indiana and Pennsylvania, expanding the reach of her crime across state lines.

The fraud totaled $152,449 in losses, with the bulk of the funds drained from the VEC. In court, Chief U.S. District Judge Rebecca Beach Smith ordered Lane to serve 57 months behind bars and mandated full restitution of $152,449 to the Virginia Employment Commission.

The case was spearheaded by a multi-agency task force including the Department of Labor’s Office of Inspector General, Homeland Security Investigations (HSI), the U.S. Postal Inspection Service, the Virginia Employment Commission, and the North Carolina State Bureau of Investigation — a testament to the sprawling nature of the fraud.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and top federal investigators from Labor, ICE, and the Postal Service announced the sentencing. Assistant U.S. Attorney Randy Stoker prosecuted the case. Court documents are available under Case No. 2:16-cr-089 via PACER or the Eastern District of Virginia’s public docket.