Inmate Unemployment Scam Lands Mother & Son in Federal Prison

MODESTO, CA – A brazen scheme to siphon off California unemployment benefits using the identities of fellow inmates has landed a Stanislaus County mother-son duo behind bars. Jaime Ornelas, 27, formerly of Modesto, received a three-year and one-month federal prison sentence today, ordered to pay $150,000 in restitution, after being convicted of conspiracy to commit mail fraud.

His mother, Misty Ornelas, 48, of Turlock, received an 18-month sentence on June 6, 2025, for her role in the elaborate fraud. The pair exploited the overwhelmed California Employment Development Department (EDD) during the height of the COVID-19 pandemic, filing bogus claims on behalf of incarcerated individuals.

According to court documents, the scheme kicked off in June 2020. While Jaime Ornelas was serving time at High Desert State Prison in Lassen County, he allegedly provided his mother with personally identifiable information belonging to other inmates. Misty Ornelas then used this stolen data to file fraudulent unemployment insurance applications with the EDD. The applications falsely stated that the inmates had recently worked and become unemployed due to the pandemic – a clear attempt to game the system.

The fraud wasn’t small-time. Investigators determined the fraudulent claims totaled more than $150,000. The operation highlights the vulnerability of state unemployment systems during a time of national crisis and the lengths to which criminals will go to exploit them. This wasn’t just about stealing money; it was about preying on a system designed to help those genuinely in need.

The case was a joint effort by the Federal Bureau of Investigation and the EDD, demonstrating a concerted push to crack down on pandemic-related fraud. Assistant U.S. Attorneys Chan Hee Chu and Denise N. Yasinow successfully prosecuted the case. This prosecution is a clear signal that those who attempt to defraud the government will be held accountable.

The Ornelas case is part of the larger California COVID-19 Fraud Enforcement Strike Force, a multi-agency initiative established by the Department of Justice. The Strike Force focuses on large-scale pandemic relief fraud across the Eastern and Central Districts of California, employing data analysis and prosecutor-led teams to identify and prosecute perpetrators. The DOJ is determined to recover stolen funds and ensure that pandemic relief reaches those who legitimately require it.

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