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Feds Calling on States to Stop Unemployment Fraud

The U.S Department of Labor estimates that states paid out over $17 billion in fraudulent unemployment payments last year. This includes both people who failed to report that they had returned to work and continued to receive benefits as well as those who claimed benefits when they weren't entitled to them in the first place.

To combat unemployment fraud, the government is now pushing states to develop measures to stop these abuses. The Office of Unemployment for the Department of Labor has set a deadline of September 30th for states, like Minnesota, to submit their plans.

Some states have already begun to crack down and have launched a series of investigations to uncover people who may have violated unemployment laws by doing any of the following:

  • Failing to report income
  • Failing to reveal work
  • Making false statements
  • Concealing other information that could impact benefits

While some may assume that this form of insurance fraud is intentional, that is not always the case. Unemployment laws in particular can be complex and it is not uncommon for people to step afoul of the laws without realizing it.

One woman was shocked to learn that she had been charged with defrauding her state's unemployment system for over $18,000. She had received partial benefits for three years after her employer cut her hours. She believed she was entitled to unemployment compensation under her state's laws. Now she is finding out she was wrong and she may have to pay back the state for the benefits she received.

The penalties for an unemployment insurance fraud conviction are severe and may last for years. Not only will people be expected to pay back the benefits received plus additional costs, but they may also have a hard time getting a job down the road.

Fraud is a black mark on your history and many employers will be reluctant to hire someone who has a conviction for fraud on his or her record. It is important for anyone charged with unemployment compensation fraud is to hire an experienced and aggressive attorney before making any statements to anyone.

Source: www.foxnews.com, "States Crack Down on Unemployment Insurance Fraud," Associated Press, 4 July 2012

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