Mother and Son Sentenced to Prison for $150K Inmate Unemployment Fraud Scheme

A mother and son from California’s Central Valley have been sentenced to federal prison for orchestrating a pandemic-related unemployment fraud scheme that stole over $150,000. Jaime Ornelas, 27, of Modesto, and his mother, Misty Ornelas, 48, of Turlock, used personal data from state prison inmates to file false unemployment insurance claims with the California Employment Development Department (EDD).

The fraudulent activity began in June 2020 while Jaime was incarcerated at High Desert State Prison in Lassen County. With access to inmates’ personally identifiable information, he collaborated with his mother to submit dozens of claims falsely stating that the inmates had lost work due to COVID-19. The fraudulent filings were part of a broader pattern of pandemic-era unemployment fraud targeting government relief programs.

Jaime was sentenced to 37 months in prison and ordered to repay $150,000 in restitution. Misty received an 18-month prison sentence at an earlier hearing in June. Federal investigators from the FBI and EDD uncovered the scheme as part of the California COVID-19 Fraud Enforcement Strike Force, a task force focused on prosecuting large-scale relief fraud.

This case highlights continued efforts by state and federal agencies to recover funds lost to pandemic fraud and hold individuals accountable for abusing emergency relief systems.