Three former state labor department employees have pleaded not guilty a week after they were indicted on federal fraud charges involving nearly $4 million in COVID-related unemployment benefits. The three are free on bond as their cases proceed in U.S. District Court in Erie.
The three entered the pleas at their arraignments on Sept. 22 before Chief U.S. Magistrate Judge Richard A. Lanzillo. He set $10,000 unsecured bonds for each of them.
The defendants, all residents of Erie County, are Sara D. Gambill, 40, Nicole L. Gambill, 41, and Geaira N. Williams, 36. Sara and Nicole Gambill are cousins, according to public records.
The three were charged in separate indictments that a grand jury returned on Sept. 15. They are accused of approving fraudulent pandemic-related unemployment claims that led to the payment of benefits to their family and friends.
The three worked for the Pennsylvania Department of Labor & Industry at the time, according to the indictments.
The U.S. Attorney’s Office alleges that approval of the fraudulent claims led to the payment of millions of dollars in federally funded unemployment benefits to claimants who were not entitled to the money.
The indictments allege that Sara Gambill, Nicole Gambill and Williams each “had an undisclosed familial, personal, intimate or financial relationship” with the claimants for whom they approved the bogus claims.
3 defendants had worked for state labor department
Sara Gambill is accused of approving fraudulent unemployment claims that resulted in $2,526,842 in benefit payments from June 2020 to January 2024, according to the indictments.
Nicole Gambill is accused of approving fraudulent unemployment claims that resulted in $921,799 in benefit payments from August 2021 to February 2024.
Williams is accused of approving fraudulent unemployment claims that resulted in $437,386 in benefit payments from January 2021 to February 2024.
Williams and Nicole Gambill worked at the Department of Labor & Industry as unemployment compensation claims examiners, according to the indictments. Sara Gambill worked as an unemployment compensation claims examiner and then an unemployment compensation claims supervisor.
The defendants no longer work for the Department of Labor & Industry, a department spokeswoman said in an email. She said the department “cannot comment on an individual’s separation,” or why an employee left the department.
Fraud charges focus on federally funded benefits
Unemployment claims in Pennsylvania are handled on the state level. The three defendants were charged in federal court because federal money funded the unemployment benefits that the U.S. Attorney’s Office alleges resulted from fraud.
Congress used federal money to expand unemployment benefits nationwide during the pandemic in an effort to stabilize the economy.
The three defendants are each charged with four counts of wire fraud and one count of theft of public money. All the charges are felonies.
The fraud charges each carry a maximum sentence of 20 years in federal prison upon conviction. The maximum sentence for the theft charge is 10 years in prison.
The three defendants are unable to afford their own lawyers, according to court records. Court-appointed lawyers are representing them.
Nicci Page represents Williams. Michael Harmon represents Sara Gambill. Adam Gorzelsky, of Greensburg, represents Nicole Gambill.
The next stage in the cases is the filing of pretrial motions. The initial filing deadline for the defense is Nov. 6.
Contact Ed Palattella at epalattella@usatodayco.com or 814-870-1813.
This article originally appeared on Erie Times-News: Three plead not guilty in Erie to approving bogus COVID jobless claims
Reporting by Ed Palattella, Erie Times-News / Erie Times-News
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This story was originally published September 23, 2026 at 5:13 AM.