John Michael “Mike” Herron II, 36, of Stockton, pleaded guilty to mail fraud and aggravated identify theft in connection with an unemployment benefits fraud and identity theft scheme, U.S. Attorney McGregor W. Scott announced.
According to court documents, from at least December 2014 through January 2018, Herron participated in a scheme to defraud the State of California Employment Development Department (EDD) by filing fraudulent claims for unemployment insurance benefits.
In furtherance of this scheme, Herron and his co-defendant, Robert Maher, formerly of Stockton, created fictitious companies and fictitious employees (by using the real identities of persons with and without their knowledge), and filed claims with EDD, falsely stating that the employees had been laid-off or fired.
The unemployment benefits were deposited onto debit cards that were mailed to addresses controlled by Herron, Maher, or their associates. In at least one instance, ATM cameras captured Herron withdrawing unemployment benefit funds using a debit card registered to an identity theft victim. Herron was connected to approximately $578,185 in fraudulent claims to EDD, of which approximately $485,685 was paid out by EDD.
Herron is scheduled to be sentenced by U.S. District Judge John A. Mendez on July 2. Herron faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for the mail fraud count, and a mandatory two-year consecutive sentence and $250,000 fine for the aggravated identity theft count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the U.S. Department of Labor Office of Inspector General, the Federal Bureau of Investigation, and the California Employment Development Department’s Investigation Division. Assistant U.S. Attorneys Amy Schuller Hitchcock and Shelley D. Weger are prosecuting the case.