Indiana Trio Jailed for $520K Pandemic Unemployment Scam

INDIANAPOLIS – A brazen scheme to siphon over half a million dollars in pandemic unemployment assistance has landed three men in federal prison. The trio exploited the chaos of the COVID-19 crisis, stealing $520,910 intended for those genuinely struggling to stay afloat. The Department of Justice, U.S. Attorney’s Office for the Southern District of Indiana, announced the sentences today, marking a significant win in the ongoing battle against pandemic-related fraud.

Kamaldeen Karaole, 24, Indianapolis, received the harshest sentence: 4 years and 3 months’ imprisonment, followed by 2 years of supervised release. He was convicted on charges of aggravated identity theft; conspiracy to commit access device fraud; and access device fraud. Stephen Olamigoke, 23, Nigeria, will spend 2.5 years behind bars, also with 2 years of supervised release, after pleading guilty to conspiracy to commit access device fraud and access device fraud. Upon completion of his sentence, Olamigoke will be subject to removal from the United States. Johnson Omodusonu, 24, Indianapolis, was sentenced to 2 years’ imprisonment and 2 years of supervised release for his role in the conspiracy, facing the same charges as Olamigoke.

All three defendants were ordered to pay restitution totaling $520,910. Court documents reveal the scheme unfolded between August and October 2020, with the group pilfering 168 Unemployment Insurance (UI) debit cards and their associated PINs. These weren’t cards issued to them; they belonged to real people in California, Arizona, and Nevada, whose identities had been stolen by co-conspirators located outside the U.S. to file fraudulent unemployment claims. The stolen cards were periodically loaded with benefits from state and federal programs, including the Pandemic Unemployment Assistance Program, Federal Pandemic Unemployment Compensation, and the Lost Wages Assistance Program.

The operation was shockingly direct. The trio used 98 of the stolen cards to withdraw cash from ATMs across the Indianapolis area, often hitting multiple machines within minutes of each other. They completed a staggering 529 withdrawals, systematically draining the accounts of legitimate benefit recipients. This wasn’t a sophisticated, hidden operation; it was a bold, repeated assault on a system already strained by unprecedented demand. “Stealing unemployment benefits meant to help people survive during one of the worst crises in modern history is both heartless and criminal,” stated U.S. Attorney Tom Wheeler.

Federal investigators from multiple agencies brought the scheme to light. Megan Howell, Special Agent-in-Charge of the U.S. Department of Labor, Office of Inspector General’s Great Lakes Region, emphasized the commitment to protecting the integrity of the UI program. “We are grateful to the U.S. Attorney’s Office for the Southern District of Indiana for their strong partnership and collaboration,” Howell said. Acting Inspector in Charge Felicia George of the United States Postal Inspection Service – Detroit Division, added that crimes like these “not only deprive real people of critical aid, but also threaten the integrity of the U.S. Mail.”

This case serves as a stark reminder of the vulnerability of vital social programs to exploitation, even – and especially – during times of crisis. The collaborative effort between the U.S. Attorney’s Office, the Department of Labor’s Office of Inspector General, and the Postal Inspection Service highlights the importance of interagency cooperation in combating fraud and ensuring that resources reach those who truly need them. The sentences handed down today send a clear message: exploiting a system designed to help those in need will be met with swift and severe consequences.