Unemployment Fraud


fotd-blog-225x175-unemp-fraudOverview:

Unemployment fraud occurs when individuals knowingly collect benefits based on false information – such as a wrong name or Social Security number – filed on the claim.  It is considered fraudulent to return to work, work part-time or work temporarily and not report earnings while collecting benefits.  Unemployment fraud increases unemployment taxes for businesses, threatens the availability of funds for people with legitimate claims, and strains the state’s unemployment trust fund.

How is Fraud Perpetrated by the Humbug Gang

In 2005 one of the inmate members of the Humbug Gang teamed up with two members of the group who also happened to be state employees in a scheme to collect unemployment benefits.  The two state employees tapped into their database to steal the identities of hundreds of state residents.  They then opened up a phony company, and pretended that all the stolen identities had been working at the company, and later let go.  The inmate, in his spare time, applied for unemployment benefits using the stolen names, and collected hundreds of thousands of dollars in benefits.

How is fraud perpetuated by the Deceit Family

Recently, Chuck’s office had to lay off 20 percent of its employees due to budget cuts.  Chuck was fortunate enough to be able to stay, but of course, he saw this as a gleaming opportunity.  One of his closest co-workers was laid off in the process, but quickly found work at another accounting office.  Chuck stole the identity of his co-worker and applied for unemployment, changing the address to a P.O. box he owned.  Since his friend had already found work elsewhere and had no need for unemployment benefits, he thought no harm, no foul – right?

How the government can prevent it

To more accurately detect unemployment fraud, Dolus will be setting up a new data filter that will run a person’s unemployment application against state records for the company of which they claim to have been let go from.  The system will flag files if the time between a company’s establishment and an employee’s unemployment is deemed insufficient or suspicious, or if multiple individuals are applying for unemployment from the same company in a short period of time.  As with all other benefits applications, Dolus will also be adding authentication-based questions to the unemployment application.  These questions are easy for the actual individual to answer, but difficult for an imposter, such as their county of residence at any given date.