Business owners forced laborers to work for free while collecting unemployment insurance
GRAND RAPIDS, MICHIGAN — Kevin Romando Johnson, 39, of Lansing, was sentenced to four years in prison; his mother Sara Johnson, 69, was sentenced to three years’ imprisonment, U.S.
Attorney Patrick Miles announced today. U.S. District Judge Gordon J. Quist also ordered the Johnsons to pay restitution of $315,471 to the Michigan Unemployment Insurance Agency (“UIA”). The sentence was imposed as the result of a conviction on October 30, 2012, after a six-day jury trial in Grand Rapids.
“In hard times, we all need to pull together,” said U.S. Attorney Miles. “Stealing from the unemployment insurance system is selfish, illegal, and clearly not worth the risk.”
The evidence presented at trial and sentencing established that the Johnsons owned and operated Lansing Total Lawn Care (“LTLC”), a commercial landscaping company. At the end of each mowing season between 2006 and 2010, the defendants laid-off laborers and coerced them into applying for unemployment insurance benefits. The defendants would then force workers to toil for the company for free throughout the winter, driving snowplow trucks and performing other labor. The defendants informed them that unemployment “was their paycheck.” Workers testified that if they refused, the defendants would call the Michigan UIA and report them as “refusing to work,” leading to termination of their unemployment benefits.
Kevin Johnson also applied for unemployment benefits for himself while running the company. He lied on over 50 UIA certifications that he had been “laid off.” Meanwhile, he represented himself as the owner of LTLC on loan applications, including for the purchase of property at the Las Vegas “Planet Hollywood” resort. Documents and testimony presented at trial established that Johnson used his unemployment checks to pay for a Chrysler 300 Limited luxury sedan, cash and other personal expenses. When interviewed by law enforcement, Johnson lied under oath that he had “never knowingly allowed any of his employees to work while collecting unemployment,” resulting in his additional conviction for lying to a federal agent.
Neither defendant ever admitted responsibility for their crime. The Court described Sara Johnson as the “enforcer” of the scheme, who told workers that if they reported the fraud, they would go to jail for collecting unemployment while her lawyer would assure that she and her son remained unscathed. The Court noted the pernicious scheme undermined a program that enables laid-off workers to support themselves and their families with dignity while looking for employment.
The Department of Labor Office of Inspector General investigated the case and Assistant U.S. Attorneys Nils R. Kessler, and Carolyn Almassian.
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