LOS ANGELES — A South Bay man who provided lifestyle and personal development coaching in public schools through a non-profit he founded was arrested Wednesday on an indictment alleging he and his accomplices fraudulently applied for millions of dollars in COVID-19 jobless benefits, partly by using stolen identities.
Reginald Foster Jr., 37, of the Westchester neighborhood of Los Angeles, was arrested on a 40-count federal indictment alleging a scheme to fraudulently obtain unemployment insurance benefits under the Coronavirus Aid, Relief and Economic Security Act, according to the U.S. Attorney’s Office.
Foster was arraigned in downtown Los Angeles, where he pleaded not guilty to the charges and an Aug. 20 trial date was scheduled. A federal magistrate judge ordered Foster released on a $50,000 bond.
Foster allegedly exploited the Pandemic Unemployment Assistance provision of the CARES Act, which was designed to expand access to unemployment benefits to self-employed workers, independent contractors and others who would not otherwise have been eligible because of the COVID-19 pandemic, federal prosecutors said.
The indictment alleges that Foster submitted multiple applications for benefits with false information that ensured the applications would be approved and the debit cards through which the benefits were dispersed would be sent to a mailing address he used.
Prosecutors argue that 118 fraudulent applications were submitted as part of the scheme. Foster then allegedly used the cards to take possession of the benefits through transfers to his non-profit, Champs Up! LLC, and $1,000 withdrawals at ATMs, court papers show.
The indictment further alleges that Foster transferred the cards to co-conspirators, who used them to make further ATM withdrawals. Foster and his associates were able to withdraw almost $1.5 million of the benefits. The benefits were frozen as soon as the scheme was uncovered, preventing further losses of more than $4 million, according to the U.S. Attorney’s Office.
Two alleged co-conspirators are also charged in the indictment: Shelece Counts, 31, of the Westlake neighborhood of Los Angeles; and Isaiah Herbert Lawrence, 30, of Houston, Texas.
Counts was also taken into custody Wednesday and was arraigned. She pleaded not guilty to the charges and an Aug. 20 trial date was scheduled. A federal magistrate judge ordered her released on $10,000 bond.
The indictment charges Foster, Counts and Lawrence with one count of conspiracy to commit mail fraud and bank fraud, five counts of aggravated identity theft, and they each face one count of use of unauthorized access devices. Foster is charged with nine counts of mail fraud and 22 counts of bank fraud. Counts is charged with 11 counts of bank fraud. Lawrence faces five bank fraud counts, federal prosecutors said.
If convicted of all charges, Foster, Counts and Lawrence would each face up to 30 years in federal prison for the conspiracy count and for each of the bank fraud counts, and up to 10 years in federal prison for the use of authorized access device counts. The mail fraud counts each carry a statutory maximum of 20 years, and a conviction for aggravated identity theft would result in an additional mandatory two-year sentence, prosecutors noted.
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