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2 plead guilty in benefits scam

White County-based conspiracy netted more than $500,000 by Dale Ellis | May 12, 2021 at 1:00 a.m.
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Two White County women indicted in 2018 in a fraud conspiracy targeting unemployment benefits pleaded guilty Monday in federal court to one count of conspiracy to commit wire fraud and face up to 20 years in prison.

Cherrie Davis, 37, of Bald Knob and Kristin Coburn, 36, of Searcy pleaded guilty before U.S. District Judge Kristine G. Baker to being part of a White County-based conspiracy that bilked more than $500,000 in unemployment benefits from six states. The payments were made via wire transfers loaded onto debit cards or direct deposits into bank accounts in Arkansas between June 2012 and August 2017.

Assistant U.S. Attorney Allison Bragg told Baker that Mark "Big Head" King of Judsonia, the accused mastermind of the scheme, used business names with addresses in the Eastern District of Arkansas to establish employer business accounts in 16 states, including Arkansas, with the state agencies responsible for administering the unemployment insurance programs in those states.

"Mark King filed false reports of earned wages for several individuals in order for them to receive unemployment insurance payouts," Bragg said.

Davis and Coburn, she said, received more than $22,000 in benefits from three states on behalf of Diamond K Construction, though neither one ever worked for that company.

Based on false wage reports, Bragg said, Davis was paid $7,244 by the Minnesota Unemployment Insurance Program, which Bragg said has since been paid back. Coburn, she said, received $7,410 from the Illinois Department of Employment Security Payments and $7,500 from the Ohio Department of Job Security and Family Services, with both sums still outstanding.

"On Aug. 21, 2016, Davis filed an electronic unemployment application in the state of Minnesota," Bragg said. "On Sept. 7, 2016 the state of Minnesota sent a letter confirming that Davis would receive unemployment benefits. And on Sept. 20, 2016 the state of Minnesota sent another letter confirming her maximum benefit amount. Those benefits came in the form of a state sponsored debit card through US Bank."

Bragg said Coburn will be required to pay back $14,910 as part of her plea agreement -- $7,410 to Illinois and $7,500 to Ohio.

The judge said she will set a sentencing date f0llowing completion of a pre-sentencing report, which she said normally takes about 90 days. Davis and Coburn, who were out of jail on pre-trial release, will be allowed to remain free while awaiting sentencing.

So far, nine of the 20 defendants in the case have been sentenced to probation or prison terms of under one year and ordered to repay the amounts they received through the fraud. The remaining defendants, including King, are scheduled for jury trials beginning Aug. 30.

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