Carlos A. Grijalva, 60, of Simi Valley, California, must give up about $46.4 million after being sentenced to 72 months in federal prison for laundering unemployment money. Judge Jennifer P. Wilson imposed the sentence on September 9, followed by three years of supervised release, in the Middle District of Pennsylvania. Grijalva had pleaded guilty to conspiracy to launder monetary instruments totaling about $46.4 million.
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In addition to the $46.4 million in U.S. currency, the forfeiture covers the contents of several bank accounts and real properties in Hawaii and California bought with traceable funds, one of them titled in a family member’s name. U.S. Attorney Brian D. Miller announced the case, which the FBI and the Department of Labor’s Office of Inspector General investigated. Assistant U.S. Attorneys Ravi Romel Sharma and K. Wesley Mishoe prosecuted it.
The scheme worked through people who never knew their names were being used. Prosecutors say members of the conspiracy, some believed to be in China, opened thousands of bank accounts using the personal information of identity theft victims, and fraudulent state unemployment claims were paid into them, including accounts held by people in the Middle District of Pennsylvania. For workers and retirees, the open question is how someone else ends up filing for benefits in their name, and what lowers the odds of it happening.
The ring opened accounts with victims’ personal information, and personal details are exactly what data brokers and people-search sites list; Incogni sends removal requests to those brokers for you and keeps re-sending them.
Fake mask companies and thousands of accounts
According to the Justice Department, Grijalva and his co-conspirators sought state unemployment compensation and other public funds through fraud. They set up companies that appeared to sell masks and other COVID-19 protective equipment, which gave the money a business reason to be moving through bank accounts.
The money then moved in steps. Funds went from the victims’ accounts to companies controlled by Grijalva, Brian Cleland and Bruce Jin, including MexUS Service, Group Mex USA, CCB Group and GC Accounting. Grijalva and Cleland used ACH transfers to take in more than $46 million this way, the release says, and then sent more than $30 million to Jin’s companies, knowing that some of it would go to parties in China.
Pennsylvania and other states made tens of millions of dollars in fraudulent unemployment payments, according to the release. It also says fraudsters based in China generated fraudulent claims.
Where the co-defendants stand
Cleland, 72, was sentenced on May 14, 2026, to 120 months in prison and ordered to forfeit about $46.4 million. Jin, 61, received 144 months on April 30, 2026, and was ordered to forfeit more than $59 million in U.S. currency and other property. Grijalva’s 72 months is the shortest of the three terms.
The Justice Department created a National Fraud Enforcement Division on April 7, 2026, and the release says the work supports a Task Force to Eliminate Fraud chaired by Vice President J.D. Vance, which aims to root out fraud, waste and abuse in federal benefit programs. The release says the new division is “laser-focused on investigating and prosecuting those who commit fraud against the American people.”
The scale of pandemic-era unemployment fraud
The Labor Department’s inspector general reports that more than $888 billion in federal and state unemployment benefits were paid during the pandemic, and that at least $191 billion could have been improperly paid. As of January 2025, its work had led to charges against more than 2,075 people and 1,550 convictions.
The Grijalva case shows how the identity-theft side of the problem works: the person whose name is on the claim is often unaware until a tax form or a state letter arrives.
Checking for unemployment claims filed in a worker’s name
The Labor Department tells anyone who suspects unemployment identity fraud to report it to the state where it occurred, using the state directory on its page. Some states require a police report or sworn affidavit first. The department also advises getting copies of credit reports at AnnualCreditReport.com, and says fraud that happened after March 2020 should also be reported to the National Center for Disaster Fraud. Its Employment and Training Administration lists a hotline at 1-877-US-2JOBS. It also says to report unrecognized accounts or inquiries at IdentityTheft.gov, which offers a recovery plan, and to consider a credit freeze.
One warning sign is a Form 1099-G for unemployment benefits that were never received; Box 1 of that form can show benefit amounts the worker never got. The Labor Department says to report only income actually received, not to wait for a corrected form before filing taxes, and that the state will issue a corrected 1099-G and update the IRS record.
Anyone who gets a letter from a state unemployment agency about a claim they never filed should contact the agency through its official state site, not through a link in a message from an unknown sender, which the department warns against clicking.
Thousands of accounts were opened with stolen personal details
The Pennsylvania case turned on one input: the personal information of identity theft victims, used to open thousands of accounts. Incogni asks data brokers and people-search sites to remove your personal information, sends removal requests on your behalf and keeps re-sending them, and you can see the status of each request in your account. Less personal data on broker lists can mean fewer scam calls, texts and emails.
Send data brokers removal requests for your name and address with Incogni →
This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
