Third Defendant Admits to Role in $46 Million Public Benefits Fraud Scheme

HARRISBURG, PA – A third individual has pleaded guilty to charges related to a sophisticated scheme that defrauded state treasuries of approximately $46.4 million, primarily through the fraudulent procurement of unemployment compensation benefits. Brian R. Cleland, 72, entered his guilty plea on November 17, 2025, admitting to one count of conspiracy to launder monetary instruments. His plea follows similar admissions of guilt from Bruce Jin in January 2025 and Carlos A. Grijalva in May 2025. Cleland and Grijalva were initially charged in a superseding indictment in April 2025, with all three defendants facing charges since August 2023.

According to the U.S. Attorney’s Office for the Middle District of Pennsylvania, Cleland acknowledged his participation with Grijalva, Jin, and unidentified co-conspirators in a plan to launder state unemployment compensation funds that they knew were obtained through fraudulent means. The scheme, which operated between 2021 and early 2022, involved creating the appearance of legitimate businesses selling masks and other COVID-19 personal protective equipment, while in reality, the funds processed through these companies were derived from illegally obtained state unemployment benefits.

Cleland’s admission detailed how bank accounts belonging to identity theft victims across the United States were unlawfully accessed to generate fraudulent unemployment claims. These claims were then paid out to these compromised accounts. He also confirmed awareness that the individuals orchestrating this fraudulent activity were located in China. Through this coordinated financial operation, the Pennsylvania Treasury Department and other state treasuries nationwide disbursed tens of millions of dollars in fraudulent payments.

The admitted actions of Cleland and Grijalva involved providing the bank account information of identity theft victims to payment processing companies. This allowed for the generation of Automated Clearing House (ACH) payments to accounts under their control. The indictment specifies that this victim account information, including account and routing numbers, was obtained from an individual in China identified as “COCONSPIRATOR 2.”

Cleland stated that he and Grijalva transferred more than $46 million through this illicit financial network. He further admitted that they discussed using the pretense of selling COVID-19 related personal protective equipment as their cover story for these transactions. The defendants also employed coded language to conceal the true nature of their dealings, referring to the individuals in China conducting the fraudulent activities as a “call center” and the illicit commercial transactions as “product.”

Subsequently, Cleland and Grijalva allegedly moved over $30 million to companies associated with Bruce Jin, utilizing a variety of bank accounts. Additional funds were also transferred to an individual identified as “COCONSPIRATOR 1.” Cleland acknowledged that he and Grijalva were aware that Jin would, in turn, transfer at least a portion of these laundered funds to parties in China.

The scheme resulted in significant personal profits for Cleland and Grijalva, with each estimated to have gained approximately $2.2 million. This profit represents about 10% of the total funds they were responsible for moving. As part of his plea agreement, Cleland has agreed to the forfeiture of approximately $46.4 million in U.S. currency, along with the contents of several bank accounts and real estate holdings in Hawaii and California. These properties were acquired using funds traceable to the fraudulent activities, including one property in California purchased under the name of a Grijalva family member. All three named defendants are scheduled for sentencing in 2026. The investigation was a collaborative effort between the Federal Bureau of Investigation and the U.S. Department of Labor, Office of Inspector General.

Article by Mel Anara, based upon information from the U.S. Attorney’s Office, Middle District of Pennsylvania

---