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Ex-GDOL staffer who stole PUA money and bought sports car going to prison

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Ex-GDOL staffer who stole PUA money and bought sports car going to prison

CRUZ: Jerome Michael Cruz leaves the District Court of Guam after he pleaded guilty in a federal unemployment fraud case earlier this year. Cruz has been sentenced to 10 months in prison for using his position at the Guam Department of Labor to divert unemployment benefits to bank accounts he controlled. Post file photo

Former Guam Department of Labor employee Jerome Michael Cruz, 26, did not get leniency from District Court of Guam Chief Judge Frances Tydingco-Gatewood as he was sentenced Thursday to serve 10 months in a U.S. Bureau of Prisons facility.

Cruz had admitted he stole unemployment benefits after he claimed he was jobless and diverted benefit payments for other claimants to bank accounts he controlled.

He was ordered to turn himself in to the U.S. Marshals Service at a later time.

Cruz asked to serve his time in Oklahoma.

He was also ordered to pay back the $14,210 he stole from the government once he is released and serve three years of probation.

Cruz told the court that his crime would come with severe consequences.

"But during the time of my incompetence, I knew that what I was doing was wrong. At that time, I was going through financial hardship. I was behind on rent and power," said Cruz.

"What about the Camaro? Is that true that you bought a Camaro with these moneys?" Tydingco-Gatewood said.

"Yes, your honor," he said.

"OK. That doesn't make me very sympathetic," the judge said. "If you are doing it to take care of your family or a roof over your head is one thing, but to buy a sports car?"

Cruz said, "I did need to be able to go to work. I didn't want to depend on my parents to keep dropping me and picking me up. It's hard enough."

"So you bought a sports car?" Tydingco-Gatewood asked.

"Well, that one, my co-worker helped me with that," Cruz said.

"I don't care. The fact is you needed a sports car to take you to work?" the judge asked.

"That's the only car they had, your honor," Cruz replied.

"Oh yeah. Sure," she said.

Cruz further said, "I got it at a rental car (business). I was worried that my family would be kicked out on the streets."

"Why didn't you just take the public transportation?" she said.

"I never tried taking the public transportation," he said.

"The more you talk the less sympathetic I am, but go ahead," she said. "You said you are desperate to help your family, but you used this money that you fraudulently took from the federal government to (get) a sports car. It sounds like you are telling the truth to what you did, and I am not very sympathetic to what you had just done."

Cruz said he was telling the truth.

"It sounds like I am making excuses, but it's the truth," he said. "Truly I am very sorry for what I did. I make the solemn promise that I will never break the law again. From the bottom of my heart, I am so sorry to all of those who I hurt."

Cruz was emotional, as he also apologized to his family members.

"Generally, when I have a first-time offender in my court, I give them a break. You were an agent, a public servant assigned at the Department of Labor to ensure that individuals who did not have jobs because of the pandemic crisis would get money to survive. You took advantage of your position at Guam DOL," Tydingco-Gatewood said.

The chief judge also told Cruz his decision get the sports car with stolen funds was irresponsible.

"Don't come before me and cry like that," she said. "What you have done is reprehensible. For someone as young as you I am surprised, because you are actually a smart guy who tried to get away with this. But your problem is you got caught. The facts of this case show that your conduct is unforgivable."

'Deliberate and calculated actions'

"Prior to this case, he had a spotless record," said defense attorney Leilani Lujan.

"So what happened?" said Tydingco-Gatewood.

"He was experiencing some significant financial struggles in regard to back rent and various loans," Lujan said.

The defense recommended Cruz get probation, while the U.S. Probation Office recommended a split sentence of five months in prison and five months of home detention.

Assistant U.S. Attorney Benjamin Petersburg told the court about the multiple times Cruz used a different employee's name to certify claims for his relatives or alter other unemployment claims to have the money deposited to a bank account he controlled.

"These are deliberate and calculated actions over a period of time," said Petersburg. "The government brings all this out to note this was a serious offense. ... Our information is he used some of this money to buy a yellow Camaro convertible and not back rent."

The government also had a Guam Department of Labor administrator, Greg Massey, testify during the hearing.

Massey read a letter to the court from GDOL Director David Dell'Isola

"Mr. Cruz's actions has caused harmed to the integrity of the PUA program," Massey said. "He violated the trust of DOL management and co-workers, as well as being the major factor where two other staff lost their jobs – he convinced them to give him their credentials. ... We ask that the court impose a just sentence to fit the crime."

False statements, theft

Cruz pleaded guilty in March to the information that charged him with federal program theft and accessing a protected computer in furtherance of fraud.

He was employed full time at GDOL in September 2020 as a customer service representative helping customers with Pandemic Unemployment Assistance and Federal Pandemic Unemployment Compensation claims.

On Sept. 26, he submitted an application for PUA and FPUC, falsely certifying that he was unemployed and eligible for the benefits, the plea agreement states. The application contained numerous warnings that false statements are punishable by law.

As a result of the false statements, Cruz received $10,935 in benefits he was not entitled to, including $3,000 in FPUC benefits.

On Oct. 13, Cruz was transferred within GDOL and lost his access to the PUA and FPUC computer system, but used another GDOL employee's login credentials.

"Upon accessing the GDOL computer system without authorization, the defendant modified an existing PUA claim for another person in order to change the payment method from paper check to direct deposit and to route that claimant's benefits to a bank account Cruz controlled," the plea deal stated.

Cruz made additional attempts to modify existing PUA and FPUC claims to his bank accounts totaling an additional $79,650. The additional attempts were flagged for fraud by GDOL employees and were not paid out.

The total intended loss was $93,000.

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