Hundreds fired from Southwest Side Target facility over alleged healthcare loan fraud, some say they were not aware of scheme

CHICAGO (WGN) — Hundreds of employees at a Southwest Side Target distribution facility have been fired after allegedly stealing more than $1 million from the company through healthcare loans.

But some of the fired employees now tell WGN-TV

they had no idea they were part of a large fraud operation. Rather, they thought they were just taking advantage of an employee benefit that could get them some fast cash, which they would then pay back over time.

Starting earlier this month, however, they were fired.

Employees at the Target Flow Center, located at 3501 South Pulaski Road in the Little Village neighborhood, say word spread rapidly about a fraud scheme carried out by their coworkers.

Block Club Chicago reports workers took advantage of a glitch in Target’s medical loan program. The glitch allowed employees to take out loans for $3,000 and pay back just $50 to have the balance erased.

Employees told Block Club’s Charles Thrush, who uncovered the story, that one employee, considered the ringleader of the fraud scheme, discovered the glitch and helped coworkers carry out the fraud.

“He found a glitch in the system where you could basically take out a $3,000 loan and only put back $50 of it, and it would all get cleared,” Thrush told WGN-TV. “And then he apparently told a bunch of his coworkers.”

The so-called ringleader would charge a $200 to $300 fee per person involved, and there were hundreds of employees in on the scheme, according to Thrush’s findings.

“You’re seeing anywhere from 400 to 700 firings from Target,” Thrush said.

The company isn’t confirming how many people were involved, but it said in a statement:

“Following an internal investigation, we have terminated team members found to be in violation of our company’s code of ethics.”

It’s not clear whether those involved could also face criminal charges. The scheme cost the company about $1.3 million, according to Block Club Chicago.

‘Not aware of it’

But after the Block Club Chicago story went to print and WGN aired a story Tuesday night, a handful of fired Target employees called and emailed WGN, saying they had no idea they were taking place in a massive fraud operation.

“If that’s happening, I’m not aware of it,” one fired employee, William Pass, told WGN-TV. “As of this point, for the loan that I borrowed this year, I paid over $2,700 back.”

The fired employees say Target was clawing back the money in the ballpark of $50 to $90 per paycheck.

“It’s not that I thought I was paying the loan back, I know I was paying the loan back,” Pass said. “I’ve got proof of it — on my paycheck stubs.”

And was he aware at all that we was participating in a large fraud scheme?

“No idea,” Pass said. “If I had a hint of it, you think I would have done it? I would’ve risked my job for that?”

Current employees, meanwhile, say they were shocked to learn of the scheme. Target is now working to fill all the positions at a noticeable pace.

“I know they’re hiring extremely mad right now. Every Tuesday and Friday you see new classes and new faces, like every single day,” Target employee Matthew Clarke said. “They’re definitely paying enough to where you shouldn’t even have to worry about trying to steal.”

Target says it’s put measures in place to make sure this type of scheme doesn’t happen again. It also says the firings will not impact business operations.

Target has not gotten into any specifics on what its internal investigation found, only that the team members who were fired violated the company’s employee code of conduct.