Two Georgia men were sentenced for a $17 million unemployment fraud scheme that prosecutors said relied on stolen identities, fictitious employers and thousands of fabricated jobless claims during the COVID-19 pandemic.
Federal prosecutors said Malcolm Jeffrey, 34, received a 10-year prison term and was ordered to pay nearly $17 million in restitution. Gerard Towns, 34, was sentenced to six years and must repay about $365,000.
Acting Assistant Attorney General Matthew R. Galeotti said the pair "orchestrated an egregious scheme to steal $17 million of unemployment insurance payouts using stolen identities," adding they "exploited a government program designed to alleviate economic hardship to line their own pockets."
Investigators said the group filed more than 2,500 fraudulent claims with the Georgia Department of Labor from March 2020-November 2022.
According to court filings, the operation depended on creating fake companies, generating bogus employee lists and using personal information from thousands of identity-theft victims.
Special Agent in Charge Mathew Broadhurst said the conspirators "submitted fraudulent UI claims using the stolen identities of identity theft victims to obtain debit cards loaded with UI benefits."
Prosecutors said the prepaid cards were mailed to locations controlled by the group and used to gather the stolen funds.
Court records show the conspirators bought victims' personal information online and also paid an employee at an Atlanta health network to pull patient data from hospital databases.
Inspector General Joseph V. Cuffari said it was "unconscionable" to exploit pandemic relief programs, and federal agents said they will continue targeting similar schemes.
IRS Criminal Investigation officials noted that Congress extended the statute of limitations to 10 years for COVID-19 program fraud, warning that "it is only a matter of time" before remaining offenders are identified.
Jeffrey and Towns are the final defendants sentenced under Operation Cordele Partial, an investigation that uncovered more than $45 million in fraudulent jobless payments tied to central Georgia and linked to unemployment programs in more than 20 states.
Towns pleaded guilty in June 2025 to conspiracy to commit mail fraud. Jeffrey was convicted at trial two months later.
Jim Mishler ✉
Jim Mishler, a seasoned reporter, anchor and news director, has decades of experience covering crime, politics and environmental issues.
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