CEO of Southern California nonprofit admits stealing $1.5M in COVID-19 benefits

A Southern California-based nonprofit CEO pleaded guilty Monday to fraudulently applying for millions of dollars in COVID-19 jobless benefits, using stolen identities to steal nearly $1.5 million, officials say.

According to the Department of Justice, Reginald Foster Jr., 38, of Westchester, Los Angeles, admitted to one count of conspiracy to commit mail fraud and bank fraud and one count of unauthorized use of access devices. 

The indictment alleges Foster took advantage of the federal Pandemic Unemployment Assistance program, part of the CARES Act passed in 2020 to help people impacted by the COVID-19 pandemic.

Between June and October of 2020, the DOJ says Foster conspired with others to file fraudulent unemployment claims using the personal information of individuals who did not authorize the applications. 

In total, Foster and his co-conspirators allegedly submitted 118 fraudulent applications to the California Employment Development Department (EDD), using stolen identities to ensure the approval of the claims. 

Foster then received debit cards issued by EDD and transferred funds from those cards to his nonprofit, Champs Up! LLC, which was reportedly created to provide lifestyle and personal development coaching to middle school students in Los Angeles and Long Beach.

According to officials, Foster also withdrew large sums of money from the cards, including multiple $1,000 ATM withdrawals. 

The group ultimately withdrew nearly $1.5 million from the fraudulent claims, according to the DOJ. 

The scheme was purportedly uncovered when EDD and Bank of America froze the remaining benefits, preventing additional losses of more than $4 million.

The DOJ says Foster now faces up to 30 years in federal prison for the conspiracy charge and up to 10 years for the unauthorized use of access devices when he is sentenced on March 24, 2025. He remains free on a $50,000 bond pending sentencing.

Two co-defendants, Shelece Counts, 31, of Los Angeles, and Isaiah Herbert Lawrence, 31, of Houston, Texas, have pleaded not guilty to charges in connection with the scheme. A trial is scheduled for January 2025.