From murder to Aryan Brotherhood to documentary star, man now faces EDD fraud charges in Lake County

Michael Lynne Thompson spent 45 years in California prisons after his conviction in two murders in Orange County in 1973, eventually becoming a leader in the notorious Aryan Brotherhood prison gang before he turned on the group.

Thompson was paroled in 2019 and began a life as a prominent ex-con, life coach and drug counselor. He was featured in several documentaries, and has touted himself as a symbol of redemption after "45 years behind the iron gates."

"I'm the quintessential square," Thompson told one podcast.

But Lake County authorities say there is more to Thompson's life after incarceration, alleging that he and a colleague he met in prison orchestrated the largest California unemployment fraud case in the county.

Thompson, 69, was arrested Monday and booked into Lake County Jail, accused of collecting more than $383,000 in fraudulent Employment Development Department funds by convincing at least 16 victims to hand over their personal information to him and co-defendant Eric Abner Hutchins, 45.

"Basically, the story was, 'Oh, well, we're going to apply for unemployment for you, we'll take a fee and we'll give you the rest,'" Lake County District Attorney Susan Krones said Wednesday. "And in most of these cases they never got any of the unemployment."

The alleged scheme involved a number of companies formed in the area, including one called Mann Ranch Inc. that Thompson lists himself as chief operating officer on his Linkedin page. He also is listed as CEO of Live, Learn & Prosper, which bills itself as a nonprofit self-help program based in Los Angeles.

Scheme targeted homeless, Social Security payments

Lake County authorities say the victims in the case were mostly homeless or transient residents who were living off Social Security or disability payments.

"The claim was that Thompson was counseling them, and this was part of the counseling," Krones said. "So what they would do is apply online as the individual.

"They would then get an award of money, have the EDD card sent to their business office in Lakeport, and set up the passwords and everything for the card. And they kept the card."

Krones said the two men "basically inflated the income of these individuals."

"These individuals did not make a lot of money, some were on Social Security or disability, so they would input the income at $50,000, $60,000 to $75,000 for 2019 to get the maximum benefit," she said.

Lake County D.A. investigator Bruce Smith said the victims were never given the passwords, online sign-on information or EDD debit cards.

"The majority of the money was immediately pulled out, as much as they could get in cash on a daily basis," Smith said. "They would go withdraw $1,000 or whatever the limit was."

A 33-count criminal complaint filed in Lake County Superior Court says the alleged scheme began in May 2020, just as the multibillion dollar California EDD fraud cases were exploding among inmates and scamsters worldwide as unemployment benefits were being funneled into bank accounts during the height of the COVID-19 pandemic.

Thompson and Hutchins also allegedly filed for EDD benefits for themselves, claiming income of $120,000 in 2019 despite the fact that both were in prison until midway through 2019, authorities say.

They also are suspected of bilking companies in the area out of up to $1.5 million in loans obtained by claiming to operate a wildfire mitigation operation and purchasing heavy equipment, then leasing it out to others for payment, authorities say.

"There's well over $1 million in loan fraud that they did where they completely fabricated that the business was doing $1.5 million a year when in reality the made zero dollars," Lake County D.A. investigator Jason Cox said. "We don't know the full scope of it yet."

Court records say Hutchins has convictions dating back to 1999 in Lake, Sonoma and Mendocino counties.

Thompson's ties to Aryan Brotherhood

Thompson, whose nickname is "Sky," is the more prominent of the pair and says in one online post that he belonged to the Aryan Brotherhood from 1977 through 1983 "before becoming 'the highest ranking gang leader to drop out' of a prison gang."

"Illiterate and dyslexic as a youth, Michael taught himself to read and write in prison and over time earned college degrees," the post states. "He holds a Ph.D. in biology and in business administration."

He has denied responsibility for the Orange County slayings and was paroled after cooperating with authorities, including in one case where he was spirited into a courthouse inside a hollowed-out vending machine, according to The Mercury News in San Jose.

In 1987, while waiting to testify in a criminal case in Los Angeles, Thompson provided information to authorities that later led to the arrest of a deputy, according to the Los Angeles Times.

Thompson had no prior connection to Lake County, officials said, and had had no interactions with law enforcement officials there until his arrest Monday.

Both men are represented by the Lake County public defender's office, which did not respond to a request for comment Wednesday.

They are due in court June 22 to enter pleas and for a bail review, and Krones noted that the defendants are "innocent until proven guilty beyond a reasonable doubt."

"I want to make sure they're given a fair trial, if it goes to trial," she said.