The Heat Rises in the South


Alabama State Representatives are fed up with unemployment fraud, and they are taking action to stop it. According to a, representatives recently announced new legislation aimed at cracking down on unemployment fraud during a State House news conference.

The Alabama Department of Industrial Relations estimates that more than 12,000 people in 2011 illegally received unemployment compensation benefits totaling more than $15 million. (Keep in mind, Alabama accounts for only 1.5 percent of the US population.? Outraged, one State Rep was quoted saying? ”The idea that over $15 million has basically been stolen from hard-working taxpayers, especially during these tough economic times, is just intolerable to me. We have a duty to make sure those who would defraud the system like this are held accountable for their actions and are deterred from doing it again.’? (I like this guy.)

Now Alabama has turned up the heat on the fraudsters with new penalties. In addition to the existing deterrents, such as fines and jail sentences, the new legislation would include a 52-week disqualification period for anyone found guilty of committing unemployment fraud, complete with the requirement of payment in full for funds illegally received. (How about mandatory jail time for those deliberately defrauding the system? For each day of unemployment stolen, you serve one day in jail AND provide full repayment. Finally, you are disqualified from receiving unemployment for life. This would be a real deterrent.)

But the state can’t do it alone – it needs help from the business community because it relies on businesses to report new hires within seven days. Then, the state uses the information to conduct quarterly cross-checks for unemployment benefit recipients and new hires. Without prompt notice, the thieves will only have more time steal from taxpaying citizens. (It might not be bad idea to make non-reporting a crime, as well.)

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Rep. Takes Aim at Unemployment Fraud” written by Mark Wilder, published by, January 5, 2012.

MONTGOMERY, AL (WSFA) – State Representative Paul DeMarco (R-Homewood) announced legislation designed to combat the growing problem of unemployment compensation fraud at a news conference on Thursday in the State House.

In the 2011 fiscal year alone, the Alabama Department of Industrial Relations estimates that more than 12,000 individuals fraudulently received unemployment compensation benefits totaling more than $15 million.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.