Recorded conversations show dozens of Cook County Jail inmates schemed to loot the federal Paycheck Protection Program and other government COVID-19 relief programs at the start of the pandemic, according to documents obtained by the Chicago Sun-Times.
Cook County sheriff’s officials opened an investigation in 2020 into inmates using jail phones to discuss various kinds of financial fraud and found they were targeting state coronavirus unemployment insurance programs, federal business relief programs and personal bank accounts.
Many of the inmates talked about raking in tens of thousands of dollars.
Despite months of plotting, though, none of the inmates was arrested or charged with fraud in connection with the schemes, according to Cook County Sheriff Tom Dart’s office, which, in response to a lawsuit filed by the Sun-Times, released hundreds of pages of investigators’ notes about recorded calls in which inmates were suspected of plotting to commit financial crimes.
The sheriff’s office blacked out the names of the detainees and the people they were talking to, citing privacy concerns. Other information was heavily redacted, too.
The lawsuit came after the sheriff’s office denied an Aug. 22 public records request from the newspaper, saying that releasing the records would “interfere with the FBI’s open investigation in this and related incidents.” A spokesman for Dart says the FBI requested the denial.
Sheriff’s officials contacted the FBI and U.S. attorney’s office in 2020 when they discovered inmates engaging in potential fraud involving federal funds in multiple jurisdictions and across state lines, the spokesman said, referring questions to the FBI.
The FBI says it won’t “comment on the nature, existence or nonexistence of any investigation that may be occurring.”
During the pandemic, fraud was rampant in state unemployment insurance programs and the federal Small Business Administration’s Paycheck Protection Program and Economic Injury Disaster Loan Program.
Last year, the inspector general for the SBA, which oversaw PPP and Economic Injury Disaster loans, estimated that at least 17% of the $1.2 trillion given out by those programs was obtained through fraud.
In the federal prison system, at least one-quarter of a billion dollars in fraudulent unemployment insurance benefits went to inmates across the country, according to a government estimate.
In Chicago, hundreds of public employees are among those suspected of pandemic relief fraud, but few have faced criminal charges. One exception saw two Chicago cops charged in a federal indictment with stealing more than $2 million in PPP money. One of the officers retired two weeks before he was charged last year.
During the pandemic, the government firehosed money into the economy through such relief programs without sufficient “guard rails” to prevent fraud, according to testimony before Congress. Despite the widespread fraud, supporters say the approach kept the economy from nosediving.
Though the fraud schemes began in 2020, information about them is still coming to light nearly four years later.
Sheriff’s records show inmates quickly learned how to apply for government pandemic benefits using false credentials. They also figured out how to purchase bank account information illegally for other schemes.
The detainees — mostly men — typically asked girlfriends and wives on the outside to carry out their financial crimes. In some cases, that included threats of violence.
“I am forcing you to do this right now,” one detainee said during a recorded call on June 6, 2020. “If you don’t, something bad will happen to you.”
The person on the other end of the call said, “I’m scared for my life.”
Laughing, the detainee responded: “I know. That’s why you have to do what I say.”
On the calls, people held in the jail said they were collecting money to post bail and pay their lawyers. Detainees said they needed up to $50,000 to be released on bail.
One said that, “when he has a total $20k, he is going to hire a new attorney to get him a bond, then turn over that bond slip to his new attorney for his fees,” according to an investigator’s report.
The detainees also were putting thousands of dollars into their jail accounts, a source of power behind bars.
In 2020, before the end of cash bond, they could post bail from their accounts. They also could buy food and other items from the commissary and send money to family and friends.
“What caught our attention in these cases was the fact that they represented an unusual increase in instances of potential fraud,” a sheriff’s spokesman says. “We conduct daily reviews of what funds come into the jail accounts and if we see something suspicious, we will investigate.”
“We are not seeing anything similar currently,” the spokesman said.
In some cases, though, investigators learned that large transfers of money into inmates’ accounts came from legitimate sources.
According to the reports from the investigation, a few inmates said they wanted to start up businesses with their fraud proceeds. One was thinking about providing security for cannabis dispensaries when he got out.
They also spoke about buying firearms.
One detainee talked about buying Glock handguns. The person on the other end of the call said, “Everyone is waiting on their checks to drop, so they can buy some,” according to an investigator’s report.
Sources have told the Sun-Times that gun possession sharply rose in parts of Chicago during the pandemic because gang members were flush with cash from defrauding government relief programs intended to help struggling businesses.
On the recorded calls, jail detainees talked about other ways to spend their fraudulent proceeds. Their wishlists included homes, vehicles like a “Benz” and a drone. Some also worried about their girlfriends going on shopping sprees with the money.
Besides the talk of fraud, the recordings offer a look into life inside the jail. In one call, a man said his fellow detainees were drinking hand sanitizer, presumably for the alcohol. Another lamented the downtown shooting death of a friend. One was on the phone with his girlfriend while she apparently was doing a drug deal with a child in the back seat of her car. Another detainee spoke with a man who said he’d been out on the streets “looting.”
A few mentioned then-President Donald Trump, who signed the law creating the pandemic relief programs the inmates were targeting. One said he hoped Trump would win re-election in 2020 because he was the reason so much money was available.
Another said he didn’t fear getting caught, saying the “feds can’t touch him,” according to one report.
In all, the Sun-Times obtained reports about the phone conversations of 27 Cook County Jail detainees suspected of engaging in fraud, though some of the documents were completely blacked out.
Many of the inmates involved in the calls — and the people they were talking to — appeared to know a lot about how the banking system and pandemic relief programs worked.
On June 16, 2020, one detainee — talking to someone on the “dark web” shopping on a site called BriansClub for people’s stolen bank information — said he wanted to buy account information only in “rich people’s” ZIP codes, places like Highland Park, Wheaton and Naperville.
“We don’t want Chase,” he said of the banking giant. “Too much security.”
On July 21, 2020, another detainee talked about buying information for several bank accounts, one that had $70,000 in it and another with $163,000.
Such fraud — called “cracking cards” on the streets — has been the subject of hip-hop songs in which some rappers have spelled out how to pull it off. The Chicago rapper G Herbo was convicted of using information from stolen credit cards to pay for private jets and designer puppies.
Jail detainees also asked their girlfriends to file for PPP loans and pandemic unemployment insurance benefits from Illinois, Indiana, Michigan, California, Mississippi, Pennsylvania, Wyoming and other states.
Indiana was “practically giving money away,” one said.
According to the sheriff’s records, investigators were on the lookout for coded words in the conversations. “Gaffle,” they said, means lots of money. “Bucks” means 1,000 — so 10 bucks is $10,000. “Salt on it” means freeze an account. And “bust a V” means buy a car.
“They use basketball players names as adjectives to describe if they have something good — I got a Larry Bird going right now,” one report said.
The investigation opened on June 15, 2020, according to the sheriff’s records, which show the FBI and Chicago Police Department were involved, too.
On Aug. 4, 2020, the investigators met to discuss the methods they heard being used to try to steal the money. The records show investigators subpoenaed bank records, which weren’t included in the documents the Sun-Times got from the sheriff’s office.
“Over the years, we have solved countless crimes based on open recorded conversations,” the sheriff’s spokesman says. “There are not many things said on the jail’s phone system that that can surprise us.”
