2016 | Police & Fire

Silver Spring Man Pleads Guilty in $1.4 Million Unemployment Fraud Scheme

Federal prosecutors say man filed unemployment claims from fake companies

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A Silver Spring man who prosecutors say bilked $1.4 million in unemployment benefits from state agencies in Pennsylvania and Maryland pleaded guilty to fraud charges Friday in U.S. District Court in Baltimore.

Federal prosecutors said Diameter Akala, 43, filed false documents with the Maryland Department of Labor, Licensing and Regulation as well as with the Pennsylvania Department of Labor and Industry in the names of companies he created—such as Event Solutions Silver Spring and Latin Productions—that falsely stated the fake companies employed and paid wages to employees.

For example, between May 2012 and July 2014, Akala filed documents claiming Latin Productions employed 76 people and Event Solutions Silver Spring employed 31, when in reality the companies never existed, according to prosecutors.

Akala and his co-conspirators would then purport to be laid-off employees of those companies in order to collect unemployment benefits. Akala set up eight companies from 2012 to 2015 as part of the scheme, which also involved at least eight other individuals who resided in Maryland, New York, Pennsylvania and Virginia. None of the fake companies ever paid any amount of unemployment insurance to the state labor agencies, prosecutors said.

Akala and the other individuals involved in the scheme would then receive hundreds of prepaid debit cards from the agencies, each worth hundreds of dollars that they used to withdraw cash at ATMs or spend at retail stores. Akala would pay other individuals to allow him to use their personal information to apply for the unemployment benefits, according to prosecutors.

In total, the conspiracy netted $1,468,463 in fraudulently obtained unemployment benefits, according to prosecutors. Akala agreed to pay restitution in that amount as part of his plea agreement. He faces a maximum sentence of 20 years in prison for conspiracy to commit wire fraud as well as additional penalties for identity theft. He is scheduled to be sentenced Aug. 4.

The fraud scheme was uncovered by The Maryland Identity Theft Working Group, which since 2006 has worked to uncover identity theft schemes in the state. The working group is comprised of more than 100 federal and local law enforcement agencies and prosecutors’ offices.