DES MOINES, Iowa (AP) — A California man has been charged with setting up fake businesses in three states, then using names taken from temporary visas issued to student visitors on a cultural exchange to obtain more than $355,000 in unemployment benefits for nonexistent workers, federal prosecutors in Iowa said in court documents.
Nikolai Monastyrski is charged in federal court in Iowa with wire and mail fraud related to the scheme that prosecutors say he perpetrated there as well as in Illinois and Pennsylvania.
A complaint filed Nov. 10 by Dana Johnson, a Chicago-based U.S. Department of Labor special agent, says Monastyrski was able to get $114,215 from Iowa Workforce Development in 2014 and 2015 and $230,000 in benefits from Illinois Department of Employment Security. Illinois payouts go as far back as 2012 and some are as recent as earlier this year. Additional claims were made involving two nonexistent businesses in Pennsylvania with payments of more than $11,300 paid out.
The investigation revealed Monastyrski filed the benefits requests from computers in his apartment in Folsom, California, and was observed on bank video cameras withdrawing cash using debit cards on which the unemployment insurance benefits were paid, Johnson said in court documents.
The investigation began in 2013 when the Illinois unemployment officials notified law enforcement that they discovered a scheme involving fictitious employers.
Monastyrski used the names of several individuals who visited the United States under an Exchange Visitor Program with temporary J-1 visas, Johnson alleges in the complaint. The program allows about 300,000 foreign visitors per year as a cultural exchange effort typically for students, professors, researchers, and others. It allows the visitor to work to receive training in the U.S. with a university or business sponsor.
In Illinois 21 individuals for which unemployment claims were made were former J-1 visa visitors who had left the country before benefits were collected using their names.
In Iowa, 20 claimants had left before their identities were used to claim benefits. Nine of the names used in Illinois were also later used to get benefits from Iowa.
Documents show Monastyrski is charged in a 14-count indictment signed by a federal judge in Iowa on Nov. 10. It includes seven charges of mail fraud and seven charges of wire fraud. He was arrested Nov. 18 near Sacramento, California. Case documents were transferred to Iowa and posted publicly on Dec. 14.
Monastyrski appeared in court Thursday in Des Moines where a judge appointed a federal public defender to represent him. He signed a document asserting his constitutional right to remain silent and have a counsel present during all interactions with the government. A Russian translator was required to assist him, court documents said.
He remains in custody and was transported to Davenport, where a hearing was set for Jan. 6 to determine whether he should remain in custody while he awaits trial.
Little information about him appears in court documents. It's unclear whether he's U.S. born, a naturalized citizen or has some other immigration status. Court documents say he was identified by comparing bank video cameras in California to a photo on a driver's license issued to him by the state of Illinois.
The federal public defender appointed to represent him and a spokeswoman for the U.S. attorney prosecuting the case declined comment.
Iowa Workforce Development spokeswoman Courtney Greene said the agency cannot comment on pending court cases but added the department works with other state and federal agencies to detect and prevent fraud.
"I can emphasize that the integrity of the Iowa Unemployment Insurance Trust fund is among the highest priorities for Iowa Workforce Development," she said.
Officials contacted at unemployment agencies in Illinois and Pennsylvania did not immediately respond to messages.