A South Bay man who ran a nonprofit providing life-coaching to public school students pleaded guilty Monday, Nov. 25, to fraudulently applying for and receiving millions of dollars in COVID-19 unemployment benefits.
Reginald Foster Jr., 38, of Los Angeles’ Westchester neighborhood, pleaded guilty to conspiracy to commit mail fraud and bank fraud and use of unauthorized access devices for working with others to fraudulently obtain unemployment insurance benefits through the Coronavirus Aid, Relief and Economic Security Act, according to the Department of Justice.
Foster admitted that, between June 2020 and October 2020, he conspired to take advantage of CARES Act benefits meant to help self-employed workers, independent contractors and others who normally would not have been eligible for unemployment benefits.
He and his co-conspirators filed fraudulent benefits applications using the names and information of others without their permission, according to the Department of Justice. Foster also included false information on the applications to make sure they would be approved and that the debit cards the funds were sent through would be mailed to him.
As part of the scheme, Foster and his co-conspirators submitted 118 fraudulent benefits applications.
Once he received the debit cards, Foster used them to transfer money to Champs Up! LLC, his Long Beach-based nonprofit that he said provides guidance to middle and high school students in Los Angeles and Long Beach. He also used the debit cards to make multiple $1,000 withdrawals from ATMs and transferred cards to his co-conspirators, who also used them to withdraw cash.
In total, Foster and his co-conspirators withdrew almost $1.5 million in benefits. When they learned about the scheme, the Employment Development Department and Bank of America froze the remaining benefits, preventing further losses of more than $4 million, the Department of Justice said.
Foster’s sentencing is scheduled for March 24. He faces a maximum sentence of 40 years in federal prison.
His co-defendants, Shelece Counts of Westlake and Isaiah Herbert Lawrence of Houston, Texas, have pleaded not guilty to criminal charges in the case. Their trial is scheduled to begin on Jan. 21.
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