CSAO: New Partnership to Combat Unemployment Insurance Fraud

New Partnership to Combat Unemployment Insurance Fraud

Cheaters beware! A new partnership combining the resources of the Connecticut Department of Labor and Chief State’s Attorney’s Office is fighting fraud by tracking down and prosecuting offenders for collecting Unemployment Compensation benefits to which they were not entitled.

Using federal funds provided to the Connecticut Labor Department (CTDOL) for integrity initiatives, the partnership has resulted in establishment of the Unemployment Compensation Fraud Unit in the state’s Division of Criminal Justice. Two inspectors and a prosecutor work with CTDOL to identify cases of deliberate fraud and then obtain arrest warrants following a thorough investigation.

“No one wants to see individuals or employers taking advantage of an unemployment system that is there to help our residents make ends meet while looking for a new job,” noted State Labor Commissioner Sharon M. Palmer. “Nationally, Connecticut has one of the best performance records in terms of successfully minimizing the number of unemployment insurance overpayments. But we are making it a top priority to implement new strategies and technologies that will put cheaters on notice and hopefully stop them in their tracks.”

In addition to fighting unemployment insurance fraud, the Labor Department is also working to prevent employers from committing fraud which is often known as misclassification. In these cases, employers deliberately treat workers as independent contractors rather than actual employees of the company, which means they avoid the expense of paying important protections, such as unemployment insurance and worker’s compensation.

“We are not talking about someone making a mistake. We are talking about larceny – stealing, the intentional theft of tax dollars that have been allocated to benefit those in need,” said Chief State’s Attorney Kevin T. Kane. “The severity of the offense is evidenced by the severity of the penalty – a maximum sentence of up to 20 years for Larceny in the First Degree by Defrauding a Public Community and up to five years for Unemployment Compensation Fraud.”

Since beginning its new responsibilities, the Unemployment Compensation Fraud Unit has made 10 arrests and is currently working on approximately 40 additional cases. Working closely with the Labor Department’s Benefit Payment Control Unit, investigators conduct interviews and validate that the individual is making no attempt to re-pay the money owed, despite official and repeated requests from the Labor Department. Cases are compiled from public tips, as well from integrity software and surveillance tools. The Chief State’s Attorney’s office requests an arrest warrant when appropriate.

In addition to the new Unemployment Compensation Fraud Unit at the Chief State’s Attorney’s office, the Labor Department has put additional programs in place and upgraded others to combat unemployment fraud. These measures include:

  • The Treasury Offset Program (TOP) and Department of Revenue Services (DRS) tax intercepts that have recouped $7.2 million in Unemployment Overpayment Debt in the first five months of 2013 from more than 8,000 individuals. It is expected that more than $9 million in fraudulently collected unemployment benefits will be recouped this year as a result of this program.
  • A dedicated online fraud reporting system, including a fillable form, that can be found at:  http://www.ctdol.state.ct.us/BPCU/BenefitsFraud.htm             
  • A tip hotline at 1-800-894-3490 can be used to report suspected fraud.
  • A surveillance program that substantiates information supplied by public tips.
  • E-filing Garnishments: an electronic process that recovers over $2 million annually.
  • Fraud Detection Software implemented in January 2013 gives the agency the ability to scan thousands of UI records to detect odd or unusual patterns.
  • Daily and automated verification of Social Security numbers with the Social Security Administration to detect invalid numbers for those trying to file a fraudulent claim.

“This new partnership is taking action to let those who have broken the law know that there are serious consequences to these actions,” noted Labor Deputy Commissioner Dennis Murphy. Our goal is to help maintain the state’s unemployment insurance trust fund and deter those that are trying to cheat the system. Ultimately this benefits employers who pay into the trust fund, the taxpayers of Connecticut, and our overall economic health.”



Content Last Modified on 6/28/2013 11:26:24 AM