State, Federal investigation leads to five indictments in Kentucky licensing fraud case

Governor Andy Beshear announced that five individuals have been federally indicted following an investigation into a driver licensing fraud scheme and says his administration has taken steps to strengthen fraud protections across the licensing system.

The criminal activity was isolated to two driver licensing offices where officials with the Kentucky Transportation Cabinet (KYTC) noticed irregularities and alerted law enforcement. Beshear emphasized that the case does not involve issuing licenses to individuals who are in the United States illegally.

A federal grand jury in Louisville returned an indictment on February 4 charging five Louisville residents with mail fraud, honest services fraud and money laundering offenses. According to the U.S. Attorney’s Office, the defendants exploited KYTC’s trust for personal profit. Prosecutors allege the group charged legally present non-U.S. citizens, who had not yet completed required driving qualifications, for an expedited path to obtaining licenses.

During a routine review of license applications, KYTC officials detected inconsistencies and revoked 1,985 credentials tied to the irregularities. They immediately contacted law enforcement, triggering a multi-agency investigation involving the Kentucky State Police, the Kentucky Attorney General’s Office, multiple U.S. Attorney’s Offices and other federal partners.

U.S. Attorney Kyle Bumgarner says proper vetting of individuals seeking a driver’s license is essential to roadway safety and to maintaining the legitimacy of state-issued identification. He says the alleged scheme involved bribes and kickbacks that led to unlawfully issued licenses.

Kentucky is not alone, other states have faced similar fraud issues. In response, KYTC has implemented a series of reforms to strengthen oversight, including enhanced fraud-prevention training, improved cross-state credential tracking, weekly briefings between leadership and fraud supervisors, new reporting protocols with law enforcement and additional supervisory safeguards.

Beshear also appointed Jeremy Slinker as deputy secretary of KYTC to advance ongoing improvements to the driver licensing system. Slinker brings years of experience including service as operations division director for Kentucky State Police, director of Kentucky Emergency Management and a leadership role with FEMA.

Slinker says there’s been significant progress made in driver licensing processes, but they can always do better. He says they are committed to protecting Kentucky licensing and preventing any future criminal activity.

According to the U.S. Attorney’s Office for the Western District of Kentucky, some of the five defendants were arraigned on February 9. If convicted, they each face up to 20 years in prison for each count of mail fraud, conspiracy and money laundering and up to 15 years for each count involving unlawful production of identification documents.