Brian R. Cleland, 72, has pleaded guilty to one count of conspiracy to launder approximately $46.4 million in fraudulent proceeds, according to an announcement from the United States Attorney’s Office for the Middle District of Pennsylvania. Cleland is the third defendant in this case to enter a guilty plea, following Bruce Jin and Carlos A. Grijalva earlier this year.
United States Attorney Brian D. Miller stated that Cleland admitted to participating in a scheme from 2021 to early 2022 with Grijalva, Jin, and other unnamed individuals to launder state unemployment compensation funds obtained through fraud. Cleland acknowledged that he and his co-conspirators made it appear as if they were running legitimate businesses selling masks and other COVID-19 personal protective equipment, while knowing that the money processed through their companies came from fraudulent state unemployment compensation benefits.
Cleland further admitted that bank accounts belonging to identity theft victims were unlawfully created and accessed across the country, with fraudulent unemployment claims paid into these accounts. He also confirmed knowledge that fraudsters based in China were conducting these activities. The fraudulent payments amounted to tens of millions of dollars issued by the Pennsylvania Treasury Department and other state treasuries nationwide.
Additionally, Cleland admitted he and Grijalva provided payment processing companies with bank account information from identity theft victims in order to generate ACH payments into accounts under their control. This information was supplied by an individual in China referred to as “COCONSPIRATOR 2” in court documents.
The plea agreement details how over $46 million was transferred through this illegal activity, with discussions between Cleland and Grijalva indicating they would use supposed sales of COVID-19-related PPE as cover for their actions. They used code words such as “call center” for those conducting fraud from China and “product” for their illicit commercial activity.
Funds were then moved using various bank accounts: more than $30 million went to companies controlled by Bruce Jin, with additional transfers made to another individual identified as “COCONSPIRATOR 1.” Cleland acknowledged knowing these funds would be sent on to parties located in China.
Both Cleland and Grijalva each made about $2.2 million in personal profit from the scheme—roughly 10% of all funds they handled.
As part of his plea agreement, Cleland agreed to forfeit approximately $46.4 million in U.S. currency along with several bank accounts and real estate properties purchased with proceeds from the offenses; these include properties in Hawaii and California, one of which was bought under a family member’s name.
All three defendants are scheduled for sentencing in 2026.
The investigation was conducted by the Federal Bureau of Investigation (FBI) and the U.S. Department of Labor’s Office of Inspector General. Prosecution is being handled by Assistant U.S. Attorneys Ravi Romel Sharma and K. Wesley Mishoe along with Trial Attorney Patrick B. Gushue from the Department of Justice’s Money Laundering & Asset Recovery Section.
The Department of Justice previously formed the COVID-19 Fraud Enforcement Task Force—a multi-agency effort designed to address pandemic-related fraud—and continues its response efforts at https://www.justice.gov/coronavirus.
If convicted on conspiracy charges related to laundering monetary instruments, defendants face up to 20 years’ imprisonment, supervised release after prison time, and possible fines; final sentences will be determined by a judge according to federal statutes and guidelines.
