Millions Lost to Unemployment Fraud in Colorado

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The state of Colorado is losing millions of dollars each year to unemployment fraud. But the key questions are? Who are the people committing unemployment fraud and what happens to them when they are caught? Denver’s 9News.com recently investigated those very topics and learned that most people who are caught don’t wind up in jail. The ”logic” is that if the fraudster is sitting in jail, he or she can’t be working and pay the state back. The names of those who are caught are posted on the state’s website. (Most of these people never expected to get caught. It’s not enough that they are on a long list of names. I think convicting them and making them stand along the highway with a sign saying ”I cheated you, the taxpayer, and this is my punishment” for 60 days at rush hour would be a lot better.? Some of the good news, those on the list have paid $617,000 in restitution.

The article cites a couple of key facts from the Department of Labor? 276,000 people in Colorado collected approximately $900 million in unemployment benefits last year. The federal agency also estimates the fraud at .07 percent or $6 million dollars. (When we audit social services and tax programs, we usually see five percent fraud. So seven tenths of one percent seems a little low to me.? According to the Colorado Department of Labor and Employment spokesperson, the state looks at about ”120 cases a year in fraud.’? (With 276,000 recipients? That’s it?)

In one instance, the article notes, an individual was ordered to pay $11,000. Following a ”multi-year investigation,” the state learned that he had filed for unemployment benefits in 2006 – four days before he started work. The Colorado Department of Labor and Employment paid him, despite the fact that he was working. (Why did they need to conduct a multi-year investigation?)

The state is offering an amnesty program to recoup funds? if fraudsters come forward and agree to pay what they owe by the end of the year, they can avoid penalties and prosecution. (That’s the smartest thing I’ve heard yet.)

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Overpaid Unemployment: People rip-off millions in benefits” by Eric Kahnert, published by 9News.com, November 30th.

DENVER – They are what the state calls the most serious offenders of unemployment insurance fraud, people who rip off millions of dollars a year from the fund that private businesses pay into.

After 9NEWS looked at the strides the Colorado Department of Labor and Employment has taken to curb its overpayment of unemployment benefits, we are now looking into the Coloradans the state says have cheated the system, and what the Department of Labor is doing to catch them.

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