LOS ANGELES — An investigation into a $2.5 million unemployment fraud scheme conducted, in part, by California Employment Development Department (EDD) investigators has resulted in another arrest .

On July 20, 2015,  Kyn K. Naope, 39, of Sherman Oaks, was arrested for allegedly participating in an the  scheme.   A six-count indictment, returned by a federal grand jury earlier this month, alleges that between January 2008 and March 2011, Naope, and others involved in the scheme, registered fictitious employers with the California EDD and then recruited other individuals to pose as laid-off employees of those companies. These fake employees would then file for and collect unemployment insurance benefits based on the wages reported to EDD by the fictitious employers.

“Unemployment insurance benefits are meant to help honest workers to stay on their feet while searching for work,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  “Investigators on the state and federal level, pooling their information and resources is what leads to arrests, prosecutions and convictions.”

This is the third indictment brought as part of this investigation. A separately pending 20-count indictment charged Kenneth Parks, Michael Taylor Sr., and three others with involvement in the fraud scheme. Parks pleaded guilty and was sentenced to five years in prison, while Taylor pleaded guilty and is awaiting sentencing.  Another indictment charged Donye Marcel Mitchell Sr. for his involvement in the fraud scheme, and he was sentenced to four years in prison.

These cases are the product of an investigation by the United States Department of Labor, Office of Inspector General and California EDD – Criminal Investigations Division. Assistant United States Attorney Jared C. Dolan is prosecuting the case.

If convicted, Naope faces a maximum statutory penalty of 20 years in prison and a $250,000 fine.