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Five Year Prison Sentence for Unemployment Fraud

​For Immediate Release | Greg Rivara, Media contact: (312) 793-9635​​ (pdf version)

Restitution of $234,000 Ordered After IDES Investigation

CHICAGO - A Blue Island man was sentenced to five years in prison and ordered to pay $234,000 to the Illinois Department of Employment Security for defrauding the unemployment insurance program. IDES’ anti-fraud efforts initiated the investigation that led to the federal conviction.

“Actions speak louder than words. This is another example that shows that when we talk about fighting fraud and abuse, we really mean it,” IDES Director Jay Rowell said. “This is not a victimless crime. Stealing from the unemployment program is no different than had the criminals reached directly into the pockets of every worker and employer in Illinois.”

According to federal records, Durand Osborne, 40, led three others in a fictitious employer scheme. A fake company was created so that fake employees could be paid unemployment insurance. Once identified by IDES, and working with federal officials from the U.S. Department of Labor and U.S. Postal Inspection Service, the fraud was allowed to continue and tracked so that a criminal case strong enough to secure a conviction could be built. Had IDES not detected the fraud, Osborne and his crew could have bilked taxpayers out of approximately $880,000.

U.S. Northern District Court Judge Rebecca Pallmeyer sentenced Osborne this week after a guilty plea to mail fraud. The fraud occurred between 2009 and 2011. The U.S. Department of Justice case number is 13CR561.

Unemployment insurance taxes pay for benefits that workers receive when they are laid off through no fault of their own. In Illinois, the taxes support 26 weeks of unemployment benefits. Operational funding for IDES – dollars used to pay salaries and utilities, for example – come from federal funds through the U.S. Department of Labor, not from unemployment insurance taxes nor from the state’s general revenue budget in Springfield.

IDES is committed to fighting fraud. It pursues fraud cases in criminal and civil courts at the local, state and federal level. The Department cooperates with outside prosecutors and has an anti-fraud unit with attorneys from Illinois Attorney General Lisa Madigan’s office.