30 members with Arizona Mexican Mafia indicted for pandemic unemployment fraud

PHOENIX (AZFamily/AP) — Arizona Attorney General Kris Mayes announced Friday that a grand jury has handed down a 50-count indictment against members and associates with the Arizona Mexican Mafia.

Thirty people are named in the indictment for their alleged involvement in conducting fraudulent pandemic unemployment assistance claims.

Federal prosecutors say the more than two dozen associates filed the claims in 2020 and 2021 by providing fake information and then using those government funds to further the mafia’s goals.

Among the charges include several counts of money laundering, assisting a criminal street gang, trafficking stolen property, conspiracy and participating in a criminal street gang.

Last year, Arizona’s Family reported about a former Arizona man who pleaded guilty in a federal courtroom to wire fraud and aggravated identity theft. Fifty-five-year-old James McAuliffe was involved in a scheme to steal the identities of Maine residents and file fraudulent unemployment insurance claims. He was sentenced to five years.

The Associated Press previously reported that scammers pocketed nearly 30% of the $16 billion in unemployment insurance payments sent out by Arizona since the start of the COVID-19 pandemic.

Most of the fraud happened in the first several months of the pandemic and mainly affected federally funded emergency unemployment insurance programs.

Those programs helped people who usually would not be eligible for assistance because they had contract jobs or were “gig workers,” such as Uber drivers. Those employers generally did not pay into the unemployment insurance system.

Arizona lost between $4.3 billion and $4.4 billion to fraud during the pandemic. The state later recovered $1.4 billion it had paid out, the AP reported.

The inspector general’s office at the U.S. Department of Labor estimated that in early 2021, the states likely improperly paid out more than $87 billion of the $873 billion in COVID-19 unemployment benefits by the time they ended in September 2021.

Still, Arizona’s 27% loss rate far exceeded the national estimate and was well above California’s.

The Associated Press contributed to this report through prior coverage.

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