Under Investigation For Unemployment Fraud? This Is What You Should Know

Unemployment fraud is a political hot button these days. Unfortunately, an innocent person can get catapulted into the middle of a fraud investigation all too easily. If it happens to you, this is what you want to know:

Innocent people get caught up in the aggressive search for real abuse.

The reason that unemployment fraud is constantly in the news is because it does happen. In 2011 alone, for example, an estimated $14 billion in unemployment benefits were paid out to people who weren't really looking for a job, had quit voluntarily, were sitting in prison, or kept collecting benefits even though they were working again. In 2013, 21 people were charged with participating in an unemployment scam that netted $5 million. 

Unfortunately, people who make innocent mistakes, often because they don't totally understand the complex rules that have to be followed when collecting unemployment benefits, also get targeted for fraud investigations. Because the state doesn't have to prove that their mistakes were intentional -- only that they were made -- an improperly filled out form can be penalized in the same way that purposeful fraud can be penalized.

It is extremely easy to end up accused of unemployment fraud.

In some cases, internal computer audits will trigger a fraud investigation months or years after someone has stopped receiving benefits, and people find themselves scrambling to hunt down lost documents to prove that they didn't commit fraud. Fines and penalties are sometimes levied before people can properly defend themselves. While unemployment agencies are promising that things will change, right now, there are a lot of people facing unnecessary scrutiny based on computerized alerts.

Also, others sometimes jump to conclusions or misuse the anonymity allowed by the unemployment fraud reporting system to exact a little revenge on a relative or neighbor who they think is "getting away with something." You can be put under fire because of an anonymous tip that says you're secretly working -- leaving you in the frustrating position of trying to prove a negative.

You can avoid criminal charges even if you made a mistake.

The reality is that the majority of fraud investigations -- 99.8% in Wisconsin -- don't end up in criminal charges, even when there is an intentional misrepresentation of facts in order to get the unemployment benefits. Prosecutors recognize that putting someone in jail over unemployment fraud makes it difficult to collect the money back. It makes more practical sense to try to get the money repaid through wage garnishments, income tax intercepts, and repayment plans whenever possible.

This means that even if the investigation against you turns out badly, you still stand a strong likelihood of being about to avoid criminal prosecution. Prosecutors tend to focus their time and efforts on those people who have made the most abuse of the system, not people who made small mistakes.

This doesn't mean, however, that you can afford to ignore the problem, hoping that it will go away, or decide to rely on your actual innocence. The smart thing to do is to consult with a defense attorney. Your attorney can help obtain clear and specific information about the accusations against you. He or she can also help you either prove that they are false or the result of a simple error. If you were overpaid, he or she can also help you negotiate for the minimum repayment possible.

For more information, contact Fadely Lewis PLLC or a similar firm.