Fraudsters are basically looking for a free ride.  How else can we account for fraudsters like the one in today’s Fraud of the Day from the Times Record News about a defendant involved in an unemployment fraud scheme?

The article reports that a defendant was recently convicted of third degree state felony theft for defrauding the Texas Unemployment Insurance program.  So, how did he do it?  His approach was pretty simple:  he filed for unemployment compensation “citing layoffs either from employers that did not exist, or for employment that never happened.”

And, he wasn’t alone.  His wife did the same thing.  (I’ve heard of “in sickness and in health,” but I’ve never heard of fraud being involved in wedding vows.)  The couple also opened up nine fake companies with the state’s tax department and “reported fictitious wages for the alleged employees of these companies.”

The defendant was sentenced to five years in jail and must pay restitution, court costs and attorney’s fees in the amount of $32,051.  His wife was sentenced to two years of probation and must pay $13,481 in restitution and fees.  (He drew the short stick there.)

So, what’s the bottom line?  It’s pretty easy for people to make false claims for unemployment compensation.  And, it’s also easy for them to file fake data for non-existent companies and employees.  Here’s the good news:  that fake data is what will get them caught.  By leveraging public records and data analytics, agencies can identify indicators for potential fraud schemes and stop the fraud before it happens.  One more final piece of good news:  states aren’t turning a blind eye to this anymore.  The Texas Department of Labor (DOL) Office of the Inspector General and the DOL Office of Labor Racketeering and Fraud worked together to crack this case.  Kudos to them!

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