Rekubit Exchange:NYC public servants accused of stealing identities of homeless in pandemic fraud scheme

NEW YORK (AP) — Several New York City employees were arrested Thursday for their alleged role in a scheme to steal the identities of homeless shelter residents and Rekubit Exchangedefraud a pandemic-era relief program.

Manhattan prosecutors brought charges against 18 people, including five employees of the city’s homeless services agency, an NYPD officer, an MTA worker, and two letter carriers for the U.S. Postal Service.

Beginning in April 2020, prosecutors allege the defendants worked together to obtain approximately $1.2 million in fraudulent pandemic unemployment benefits by filing bogus claims on behalf of 170 people — most of whom live in city-run homeless shelters.

“Stealing the identity of New Yorkers, many of them homeless, and defrauding a critical social safety net program in one of the most challenging times in our city’s history is downright shameful,” Manhattan District Attorney Alvin Bragg said at a press conference. “This type of conduct by our public servants is unacceptable.”

Each of the defendants who were arraigned on Thursday afternoon pleaded not guilty to charges that included grand larceny, conspiracy, and burglary.

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Prosecutors said they uncovered the benefits fraud while pursuing a separate case against two Department of Homeless Services employees for their alleged involvement in manufacturing ghost guns.

In the course of that investigation, they learned that several DHS employees were using their positions to steal the personal information of unwitting homeless residents, according to the criminal indictment.

They also enlisted a U.S. postal worker, instructing the Department of Labor to send the bank cards to addresses they knew were on his route so he could intercept them, prosecutors said.

As the scheme progressed, some of the participants turned against each other. At least two defendants are accused of stealing $30,000 from the home of a co-conspirator, who they believed was hoarding the proceeds.

One of the individuals allegedly involved in the burglary left her DHS job for a position at the NYPD, prosecutors said, before rejoining the homeless services agency after she was fired by the police department in 2022.

A second individual involved in the conspiracy worked as a school safety agent at the NYPD. She was terminated on Thursday, the police department said.

A spokesperson for DHS did not respond to a request for comment.