A Person Who Makes A Mistake Or Has No Intent To Commit A Crime Should Not Have Their Life Ruined With A Criminal Conviction
In January of 2020, the Attorney General announced the creation of a Task Force for investigating and prosecuting allegations of fraud in Michigans unemployment insurance program. The Task Force is comprised of the Attorney Generals Office, the Michigan State Police, the U.S. Department of Labor, the Office of Inspector General, the Michigan Department of Labor and Economic Opportunity, the Michigan Department of Management & Budget, and the Michigan Department of Treasury. With all of these agencies combined power, a person accused of unemployment fraud will need an equally powerful defense attorney to help them avoid charges or a conviction, if possible, and get out of a harsh sentence.
Why Michigan Unemployment Benefits Overpayments Happen
An unemployment overpayment can happen anytime you receive benefits that you werent entitled to receive. The reasons for these overpayments can vary from innocent to intentional, including:
- Errors on your unemployment insurance application
- Termination for cause from your prior employment
- Ongoing disability that renders you unable to work
- Failure to meet the Michigan work search requirements
- Making yourself unavailable for suitable work
- Failing to report part-time employment
- Making false or misleading claims on your application
- Identity theft
Irs Information For Employers
Employers are often the first line of defense against unemployment fraud. Employers should:
- Respond quickly to state notices that its employees have filed for unemployment claims, especially if the names on the notices are not employees
- Be alert to misuse of the IRS-issued Employer Identification Number that fraudsters may use to file jobless claims
- File a Form 14039-B, Business Identity Theft Affidavit, if the companys EIN is being used to generate fraudulent unemployment benefit claims.
- Write to the IRS to close out the business tax account if the company is going out of business this will help curtail the misuse of dormant EINs.
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Justice Department Warns On Fake Unemployment Benefit Websites
The Department of Justice recently warned that fraudsters are creating websites mimicking unemployment benefit websites, including state workforce agency websites, for the purpose of unlawfully capturing consumers personal information.To lure consumers to these fake websites, fraudsters send spam text messages and emails purporting to be from an SWA and containing a link. The fake websites are designed to trick consumers into thinking they are applying for unemployment benefits and disclosing personally identifiable information and other sensitive data. That information can then be used by fraudsters to commit identity theft.
Help stop these scams by reporting them and using the list of state contacts at DOL.gov/fraud.
What Are The Penalties For Unemployment Insurance Fraud
All states are required to assess a penalty of not less than 15% of the amount of the fraudulent payment. Other penalties under state unemployment insurance laws generally include criminal prosecution with fines and/or incarceration required repayment of fraudulently collected benefits forfeiting future income tax refunds and/or permanent loss of eligibility for unemployment compensation. Commission of unemployment benefit fraud may also be prosecuted by the U.S. Department of Justice in federal courts under 18 U.S.C § 1341 or other appropriate federal statutes.
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Charged With Stealing $725000 In Unemployment Pay From Michigan
The entrance to the Labor Department is seen near the Capitol in Washington. Unemployment fraud has reached dramatic levels during the pandemic
A routine traffic stop near Somerset Mall in Troy last November led investigators to a multimillion-dollar unemployment fraud scheme.
Federal prosecutors have charged four Michiganders with mail fraud, wire fraud, aggravated identity theft and conspiracy to commit mail and wire fraud. One of the defendants has been in federal prison since 2019 in Pennsylvania for similar crimes.
The group filed more than 240 fraudulent claims for themselves and others to get unemployment benefits in at least 20 states. They defrauded Michigan of more than $725,000 and California of more than $1.5 million.
The following four people have been charged, per a complaint filed in Detroit federal court by the U.S. Attorneys Office for the Eastern District of Michigan.
- Daeshawn Tamar Posey, 25, of Detroit
- Chaz Duane Shields, 33, of Detroit
- Cortney Shaquan Shields, 30, a current federal prisoner incarcerated at FCI Allenwood, brother of Chaz Duane Shields
- Brittany Levett Witherspoon, 25, of Warren
They used the money to buy jewelry, furniture and high-end cars in cash even going as far to start a new luxury chauffeur business called Vainglorious Transports, LLC, prosecutors allege. Purchases included a $77,000 Bentley and a pair of Mercedes-Benz vehicles totaling nearly $160,000.
Unemployment Fraud Defense Attorneys
If you have been accused of fraud or embezzlement of unemployment benefits, call LEWIS & DICKSTEIN, P.L.L.C. for a free consultation, and we will take the time to talk with you, answer all of your questions, and address each of your concerns. We will work with you to develop a winning defense strategy.
Call us today at 263-6800 for a free consultation or complete a Request for Assistance Form. We will contact you promptly and find a way to help you.
We will find a way to help you and, most importantly,we are not afraid to win!
Michigan Unemployment Fraud Penalties
IT IS NOT ILLEGAL TO WORK WHILE YOU ARE COLLECTING UNEMPLOYMENT BENEFITS.
You are able to work at a job and make a certain amount of money while still collecting unemployment benefits. When you apply for unemployment, this amount will be determined, and how this works will be explained to you by your unemployment counselor.
IT IS A CRIME TO COLLECT UNEMPLOYMENT BENEFITS WHEN YOU ARE NOT ELIGIBLE FOR THEM
If you willingly collect unemployment benefits when you are not eligible for them, and when you dont meet all the requirements this is considered unemployment fraud and there are stiff penalties for committing unemployment fraud.
Unemployment Fraud Penalties include some or all of the following:
1. Fine. You may have to pay back the unemployment money you collected and pay a large criminal fine. 2. Jail. You may be sent to jail if you are found guilty and convicted of unemployment fraud. 3. Probation.
Questions About Applying For Unemployment
To be eligible for unemployment benefits you must meet all of the following requirements:
Be involuntarily unemployed through no fault of your own
Be able and available to work full time
Be actively seeking full-time employment
Meet the minimum wage requirements
Read the article Applying for Unemployment to learn how to apply for benefits.
You can apply for unemployment online or by phone. If you file online, it is a good idea to save or print a copy of your application. Then if it gets lost, you can prove when you filed it.
You should have all of the following information available when applying for benefits:
Your Social Security number
Your driver’s license or state ID number
The names, addresses, dates of employment, and wages paid by the employers you worked for during the past 18 months
Your banks routing transit number and your account number if you want direct deposit for your benefit payments
Your alien registration number and the expiration date of your work authorization if you are not a U.S. citizen
Your personal identification number from any previous unemployment claim if you have one
Read the article Applying for Unemployment to learn how to apply for benefits.
It is best to apply in your first week of unemployment, but you should register with Michigan Works! before you claim your first week of benefits.
After you apply for unemployment, the UIA will decide if you are eligible and if you qualify for benefits.
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I Want To Report A Fraudulent Claim Or Identity Theft Against My Company And/or My Employee What Should I Do
If you have found your company or employee is a victim of UI fraud or Identity Theft, there are several ways to report to UI:
General Questions About Unemployment
You can get up to $362 a week for 14 to 20 weeks.
The UIA calculates your weekly benefit amount by multiplying the wages paid in your highest base period quarter by 4.1%. You also get an extra $6 per week for each dependent you claim, up to five dependents, but your benefits cant exceed $362.
For example, if your highest base period was $5,000 and you have three dependents, your weekly benefits could be $223 = $223).
To figure out how many weeks you may get benefits, your total base period wages are multiplied by 40% and then divided by your weekly benefit amount. If your claim is calculated to be less than 14 weeks, you cant get benefits at all. You cant get unemployment for more than 20 weeks. For example: if your total base period wages are $12,000 and your weekly benefit amount is $223, you would receive those benefits for 20 weeks , because weeks cannot exceed 20.
Your standard base period is the first four of the last five completed calendar quarters before you filed your unemployment claim. There are four calendar quarters in a year:
For example: if you file your claim in July 2020, the four quarters in your standard base period are:
If you dont qualify because you didnt have enough wages in the standard base period, you may be able to qualify with your wages in the alternative base period. This is the four quarters right before you file for unemployment. So, if you file your claim in July 2020, the four quarters in the alternative base period are:
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Report: Michigan Unemployment Office Knowingly Paid Out Fraudulent Claims
State Rep. Mary Whiteford led a rally at the state Capitol on June 16, 2020, calling on Michigans Unemployment Insurance Agency to immediately help Michigan families.
The Michigan Unemployment Insurance Agency knowingly paid out thousands of dollars in fraudulent claims during the COVID-19 pandemic, including to names such as Kimberly Kardashian and Kylie Jenner, according to a news report.
About 3.1 million Michiganders filed claims in May 2020. Michigans unemployment rate sprung to 22.7% in April, topping the states unemployment rate from the Great Recession and seizing the nations second-highest spot while the state shuttered in-person unemployment offices.
By June, the agency said it boosted employees from 130 pre-pandemic to 2,200 to clear a backlog of claims. Still, lawmakers said then 140,000 unemployed residents were still waiting on benefits.
The Detroit News reported Kardashian filed May 13 from Traverse City and received eight weeks of backdated unemployment pay more than $7,000 before the states fraud management software flagged the claim on May 15 as needing additional identity verification.
The report said a software error let the state pay out fraudulent claims, and in other cases, the agency lowered defenses to speed through a claims backlog, giving away taxpayer money to fraudsters as collateral to reach the real unemployed Michiganders.
The report follows a series of mistakes by the agency.
Uia Releases Report On Potential Fraud Exposure
Report identifies specific steps Agency took to enhance fraud prevention and address vulnerabilities, ensuring protection of Michiganders and unemployment system
Contact: , 517-282-0041
The Dept. of Labor and Economic Opportunity and Unemployment Insurance Agency have submitted to Gov. Gretchen Whitmer a report prepared by Deloitte & Touche LLP documenting the chronology of the States efforts to identify and respond to fraud risks regarding unemployment claims during the COVID-19 pandemic.
In July 2020, LEO selected Deloitte, a nationally recognized professional services organization, to assist the UIA with financial operations, investigations into imposter claims and a forensic review to help identify fraudulent activity that can be quickly turned over to law enforcement for prosecution.
The report identified areas where UIAs policy, technological and organizational changes increased the Agencys potential exposure to fraud, and documented steps UIA has already taken to enhance its fraud risk management capabilities to address those identified vulnerabilities in the unemployment system.
In June, the Agency appointed Jeffrey Frost, a retired Special Agent in Charge for the U.S. Secret Service, to provide expertise in the UIAs efforts to counter the criminal attacks being experienced by unemployment systems around the country, analyze fraudulent unemployment activity and clear legitimate accounts.
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Local Retiree Questions What To Do With 1099
“Now I have a 1099 that says it’s for $4,880,” said Karol Settergren, a retired high school counselor.
Taking a close look at the 1099, she said, it shows that withholdings of $488 for federal income taxes and $270.40 for the state.
“It has my Social Security number on here,” she said.
“Now, I’m just concerned what happens when I go to file my taxes.”
Settergren, 73, did not file for unemployment benefits in 2020.
She remembers that she did get some paperwork in the summer that said she was denied her claim for unemployment benefits because she didn’t provide enough identification. She did not keep that letter.
Again, though, she did not expect a problem since she received information saying the claim was reportedly denied.
“It’s just another thing to deal with,” she said. “It seems like everything is going wrong in this year of COVID-19.”
Last year, a large-scale imposter scheme hit state unemployment systems across the country. Many times, the crooks filed claims for people who didn’t lose jobs, such as school teachers, retirees and even some small business owners.
On Monday, California officials confirmed that the state paid out more than $11 billion in unemployment claims relating to fraud during the pandemic, according to The Hill.
An independent report in November indicated that Michigan might have at one point through late May paid out up to $1.5 billion to such fraud.
Task Force Takes Action To Protect Against Unemployment Fraud Ensure Proper Benefits
Michigans multi-departmental Unemployment Insurance Fraud Task Force of state and federal agencies is collaborating to investigate and prosecute unemployment fraud and bring criminals to justice. Members are also partnering to assure legitimate claimants receive the benefits they deserve and protect Michiganders from unemployment identity theft.
State unemployment insurance systems across the country have been under attack by well-organized criminals attempting to take advantage of the unprecedented global pandemic and economic crisis to illegally obtain benefits through imposter claims. Bad actors are using previously stolen or false personal information from data breaches involving Equifax and others to apply for benefits.
Unemployment benefits should go to Michigan residents dealing with the hardships of COVID-19, not to criminals seeking to profit from the loses of others, said Michigan Attorney General Dana Nessel. Unfortunately, this unprecedented public health crisis has created an opportunity ripe for abuse by people who are exploiting the system and hampering the ability to get legitimate claims paid.
Processing Legitimate Claims
Task Force members are actively engaged in identifying, locating and prosecuting criminals suspected of unemployment fraud. Actions include:
The UIA has resources to help protect Michiganders against unemployment identity theft.
National Unemployment Fraud
Unemployment Insurance Fraud Task Force
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Detect Fraud Prevent Fraud
UI Fraud is a crime, and it affects everyone. It drives up unemployment taxes for businesses, it affects people with legitimate unemployment benefit claims, and it puts a strain on the states unemployment trust fund. The person committing fraud could be a claimant who is intentionally misrepresenting information being provided to the Unemployment Insurance Agency when filing and/or certifying for unemployment benefits or could be a traditional fraud matter whereby a criminal is impersonating or representing themselves as a claimant for unemployment benefits. In every instance of fraud, individuals may face criminal prosecution, fines, and penalties of up to four times the amount.
UIA is committed to the prevention, detection, investigation and prosecution of those who commit unemployment insurance fraud.
How Does the UIA Detect and Prevent Fraud?
- UIA Fraud Manager Program utilizes proprietary scoring determined from an examination of fraudulent claims to identify claim inconsistencies. This proprietary scoring program has been the single largest influencer in combatting the rampant number of fraudulent claims filed from 2013 through 2017.
Identity theft occurs when someone uses another person’s informationincluding wage, employment, and credit card informationto take on their identity. Identity thieves can also use another persons name, Social Security number, and employment information to illegally file UI claims and collect UI benefit payments.
Report Fraud To The Office Of Investigative Services
Office of Investigative Services
The Michigan Department of State Office of Investigative Services is committed to protecting the integrity of all MDOS programs and documents issued by the agency.
If you witness, suspect or know of fraudulent, improper or suspicious activity involving any MDOS documents or programs, please contact the OIS immediately at:
FRAUD TIP LINE: 844-372-8356
When you contact OIS, please provide as much detail as possible. Please include your contact information as an investigator may need to contact you for additional information. All reports will be kept confidential.
Here are a few examples of helpful information to include:
- Who committed the fraud?
- What did the individual do what fraud is suspected?
- Where did the fraud take place?
- When did it happen?
- How was the fraud committed?
- Who else has knowledge of the fraud?
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Michigan Overpaid $62m In Unemployment Claims Last Year Fraud On The Rise
in Michigan. A
Detroit Free Press
story documents the 3,206 cases involving more than $6.2 million in overpayment in 2009. Both figures are up almost 40 percent over 2008 numbers.
Under Michigan law, unemployment insurance fraud is a misdemeanor, punishable by up to a year in jail and a fine of four times the amount of the fraud. If the illegally obtained benefits exceed $25,000, the crime is a felony and penalties increase, though judges tend to focus on restitution rather than jail time.
Unemployment fraud includes:
- Working and getting paid under the table while collecting unemployment benefits.
- Taking a job in another state and continuing to collect unemployment from Michigan.
- Using identity theft to facilitate fraud.
- Finding a job and not reporting the new income.
People who collect unemployment benefits can take part-time jobs and still get the benefits, though as their income rises, the benefits decline. Minor cases of overpayment typically are handled with a notice being sent to the recipient indicating they received undeserved benefits.
For additional details about benefits and who qualifies, go to the