Former Labor Department Employee Pleads Guilty to $40,000 Pandemic Unemployment Fraud

BOSTON — A former employee of the U.S. Department of Labor pleaded guilty in federal court in Boston to one count of fraudulently obtaining more than $40,000 in pandemic unemployment assistance benefits.

The plea, entered May 12, 2026, involves a single individual who worked at the department while securing the benefits. The fraud targeted the Pandemic Unemployment Assistance program, which Congress created in March 2020 under the CARES Act to provide payments to workers who did not qualify for regular state unemployment insurance, including independent contractors, self-employed individuals, and gig workers.

The program distributed more than $260 billion nationwide before it ended.

The guilty plea changes the individual's legal status from defendant to convicted party. Sentencing has not yet been scheduled. Under federal sentencing guidelines, the conviction carries a maximum of five years in prison and a fine of up to $250,000, though actual penalties will depend on final calculations that include restitution.

Downstream, the Department of Justice must now calculate and seek full restitution to the federal government. The case will be referred to the U.S. Probation Office for a presentence investigation report. Federal prosecutors in the District of Massachusetts will file a sentencing memorandum outlining the loss amount and any acceptance of responsibility.

The Labor Department, as the former employer, faces standard post-plea administrative obligations including review of internal controls that allowed an employee to obtain benefits while on payroll.

This marks the latest enforcement action tied to pandemic unemployment fraud identified by the Department of Justice. The department has pursued hundreds of similar cases since 2021, focusing on schemes that exploited relaxed verification standards Congress authorized during the public-health emergency.

The Pandemic Unemployment Assistance program itself expired in September 2021, after which states and the federal government began intensified audits and cross-checks against payroll and tax records.