Unemployment Insurance Fraud
Like most large metropolitan areas, Los Angeles has been experiencing an uptick unemployment insurance fraud cases. The state of California frowns on these types of case, and for good reason: they cost the state and the taxpayers’untold dollars in lost revenue.
Unemployment insurance fraud occurs when a person gives false information, or fails to report income to the Employment Development Authority (EDD). When you file a claim, or call in to verify a claim, you are required by law to notify the agency of any changes in your status, or you could face serious criminal penalties.
An example of what the law is referring to would be you filing an unemployment claim and receiving benefits. At the time of the filing you may well have been out of work, but later rejoined the workforce and yet failed to notify the EDD. Maybe you were under some kind of financial strain and that led you to view your actions as legitimate. After all, your benefit check, coupled with your paycheck, could probably go a long way in resolving some of your outstanding debt. However, according to California law, such an act is illegal.
The rules governing unemployment insurance fraud in the state of California are found under Unemployment Insurance Code Section 2101-2129 of the California Penal Code.
If you are found guilty of unemployment insurance fraud, one of the painful consequences of this offense is that you will be required to pay back all monies you received from the scheme, even money you may have already spent. This could strain your financial situation even more, as federal, state and municipal debts are considered senior debt and, therefore, repayment much takeprecedence over all your other debts.
You may also have hampered your ability to get financial relief in the future, as any attempts by you to collect unemployment benefits will undergo severescrutiny. In addition, if you are allowed to receive benefits again, you will be required to follow the stipulations of the contract to the letter. What’s more, you may even be disqualified from receiving benefits altogether.
But as bad as that prospect may seem, that’s not the worst thing that can happen. Depending on the severity of the offense—if you collected a large sum of money, or committed fraud more than once—you could face criminal charges, and could even receive jail time. For example, if you’ve collected benefits under multiple names, or falsified the name of others, you could face a lengthy prison sentence.
As you can see, your problems will only multiply under the previous scenario. It is well-known that, once a person is convicted of a crime and sent to prison, he is stigmatized for life. However, you should know that all unemployment insurance fraud cases are tried in criminal court, so, even though you may be able to avoid jail time, the offense will still go on your record. This could be troublesome in the future when applying for jobs or housing. A lot of job applications ask whether or not you have ever been convicted of a felony, and, needless to say, employers usually frown on such dishonesty.
The bottom line is the consequences of an unemployment insurance fraud conviction could be devastating. So, if you find yourself facing unemployment insurance fraud charges, it might be time to consult a good attorney.
The prosecutor in the case will rely heavily on the evidence gathered against by the EDD fraud investigating team. If he believes there is enough evidence against you, he will proceed with the prosecution. If not, he might decide to wait until there is more evidence before proceeding.
Here are some of the things the prosecution will look for while reviewing your case:
- Whether or not you continued, or resumed, working while receiving unemployment benefits, and that you did so without notifying the EDD.
- You received other types of compensation while receiving unemployment benefits, like a pension, worker’s compensation, or any other similar compensation.
- Using a fake name, social security number, or employment information while receiving unemployment benefits and continuing to work.
It should be noted here that employees aren’t the only ones who can be charged with unemployment insurance fraud. Employers can also face criminal charges if they intentionally provide false information about why an employee was fired. In addition, falsifying an employee’s wages in order to reduce the amount they have to contribute, or knowingly deducting from an employee’s wages and not paying said deductions to the EDD can get an employer in deep legal trouble.
Fortunately, not all unemployment insurance fraud cases are a slam dunk. A good attorney may be able to help you mount a successful defense. For example, the prosecutor must prove that you had fraudulent intent. If he is unable to prove you had fraudulent intent, the judge will have to dismiss the case.
You may be wondering how it is possible for you to accidentally file a false claim. Well, you could argue that you believed that the information you presented was legitimate; or you may have accidentally presented the wrong information (social security, etc.); or you were unaware that you were required to notify the EDD about surplus income. Under these circumstances, you would not have committed fraud.
The upsurge in unemployment claims necessarily meant an upsurge in fraud cases. In an effort to reduce the backlog, some prosecutions were rushed and evidence sloppily compiled, resulting in a substantial number of those cases being dismissed because of a lack of evidence.
For example, your company has been charged with withholding employees’deductions, but failing to pay those monies to the EDD. However, you may be able to get off the hook by claiming ignorance since you didn’t personal handle the bookkeeping. If the prosecutor is unable to come up with enough evidence to link you to the crime, you should be acquitted.
Penalties for unemployment insurance fraud are usually meted out according to the severity of the offense. These penalties can vary greatly and you could be charged either as a misdemeanor, or felony. The severity of the sentence could hinge on the severity of the crime, and/or your criminal history.
If convicted on a misdemeanor, you could face up to a year in jail and a fine of up to $20,000. But, if you are convicted on a felony charge, you could be imprisoned in the state of California prison system for anywhere between 16 months to three years, and face fines up to $20,000.
The prosecution could, however, suspend criminal charges in lieu of you paying restitution. This is an avenue some prosecutor take when a criminal conviction could result in the loss or suspension of someone’s professional license. This is of course dependent on the severity of the offense, and the skillfulness of your defense attorney.
Because fraud unemployment insurance cases usually involves some sort of theft, additional charges could be forthcoming after you are tried for fraud and face another three years in prison and an additional $10,000 fine.