A SoCal Inmate Masterminded A $2M Pandemic Benefits Crime Ring: DOJ

Natalie Demola was the ringleader of a $2 million scam that involved 12 other individuals, the DOJ said.
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As the COVID-19 pandemic tore across Los Angeles in the spring of 2020, and unprecedented job losses followed, a woman serving a life sentence in a Corona prison for her mother’s murder concocted a multi-million benefits fraud scheme, the Justice Department announced this week. 

Natalie Demola was the ringleader of the $2 million scam that involved 12 other individuals—including at least one California corrections official, the 39-count indictment from the DOJ revealed on Tuesday. Five members of the ring have been arrested and 13 defendants have been charged with conspiracy to commit wire fraud and bank fraud, the department said. 

Demola’s plan was pretty simple. Through channels outside of her prison cell in Corona, she obtained personal information of individuals who were employed, retired, incarcerated, or otherwise not eligible for unemployment insurance and pandemic-related benefits. Names, dates of birth, and Social Security numbers were gathered, which were then used to apply for the relief as the distribution of largesse skyrocketed. 

“Members of the conspiracy then allegedly used the information to make fraudulent online applications for [unemployment insurance] benefits from the California Employment Development Department,” the DOJ said, sharing information from the indictment. “Once the applications were approved, members of the conspiracy received EDD-funded debt that allowed them to withdraw money from ATMs across Southern California.”

The inmate and her ring of fraudsters then repeated this again and again; the conspiracy count alleges that in the end, there were 150 overt acts.

Demola has been imprisoned since she was found guilty of the murder of her mother in 2001. She and her 17-year-old boyfriend at the time, apparently upset because her mother disapproved of their coupling, beat the woman to death at her home in Corona. Demola was 16 at the time. Since August 2005, she has been held at the California Institution for Women in Corona, according to Corrections records, which show she is eligible for parole consideration in 2026, as she was a youth offender. 

Carleisha Neosha Plummer, 32, is one of the 12 others named alongside Demola as a co-conspirator in the fraud ring. Demola apparently met Plummer in prison where they became close associates, the DOJ said; she was granted parole in July 2020 and subsequently released. The many instances of fraud, the department said, primarily occurred during the second half of 2020.

The five arrested this week were set to be arraigned on Tuesday in the U.S. District Court in Los Angeles. Conspiracy and bank fraud charges leveled at each of the five carry a statutory maximum sentence of 30 years in federal prison. The aggravated identity theft charges come with a mandatory two-year consecutive sentence if each is found guilty. 

It is unclear if Demola has been arraigned on the charges or when she will stand before a judge for these alleged crimes. No legal representative to potentially speak on her behalf was listed on court documents. 

Around $87 billion in pandemic unemployment benefits could have been paid improperly across the country, the Department of Labor estimates. An analysis conducted by the Associated Press estimates that about $11 billion in fraud took place in California.


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