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Unemployment Fraud

On Behalf of | Jan 11, 2024 | Small Business Law

With an unprecedented amount of people currently collecting unemployment benefits because of the Covid-19 pandemic, it is important to know how to avoid the consequences of unemployment fraud. Unfortunately, many good people find themselves being investigated or even charged with crimes for making a simple mistake.

What is Unemployment Fraud?

When a person loses their job, through no fault of their own, they may be entitled to unemployment benefits. The person will need to complete an application through the New York State Department of Labor. It is important to provide accurate information on the application. After the person is approved for unemployment benefits, they need to complete weekly recertifications either online or over the phone.

During the recertification process, the person will be asked a series of questions including if they worked the previous week and, if so, how many days they worked. The most common form of unemployment fraud occurs when the person fails to disclose that they are back to work in order to continue to receive unemployment benefits.

What Types of Charges are Possible?

A person who intentionally files false information with the Department of Labor can be charged with a class E felony (Offering a False Information for Filing in the First Degree and/or Falsifying Business Records in the First Degree) for every false document they file. For example, a person who falsely claims they are not working every week for 24 weeks, could be charged with felonies for every certification they filed during those 24 weeks.

Additionally, the person could be charged with another class E felony (Grand Larceny in the Fourth Degree) if the amount of benefits they wrongfully received was over $1,000 or a class D felony (Grand Larceny in the Third Degree) if the amount is over $3,000.

The possible punishments could include probation, restitution, weekends in jail, community service, or even jail or prison time. In addition, the person may face civil penalties such as fines, and they may be ineligible for unemployment benefits for a period of time in the future.

How Do I Avoid Being Charged with Unemployment Fraud?

The best way to avoid charges is to make sure you don’t receive overpayments in the first place. This is why it is critical to be honest when completing the initial application and the weekly certifications.

One of the most common mistakes people make is failing to report part-time or self-employed work. If you worked during the previous week, you must report it during the weekly certifications, even if you are not back to work full-time. You may be entitled to reduced benefits if you are working part-time, but the Department of Labor needs to know how many days you worked to do these calculations.

It is also important that you not share your PIN number you receive from the Department of Labor or your social security number with anyone. Someone could use this information to steal your unemployment benefits from you and you could be the one who ends up in trouble. If you need help completing the application or certifications, you should read the instruction or contact the Department of Labor rather than consulting a friend or family member who may provide you with inaccurate information.

What Should I Do if I Think I’m Being Investigated for Unemployment Fraud?

You should contact an attorney. An attorney can review the evidence and determine if you did something wrong. If you received overpayments by mistake, your attorney may be able to work with the Department of Labor to allow you to make repayments without formal charges.

If you believe you may have received overpayments, you should consult with an attorney before contacting the Department of Labor directly. Anything you say to the Department of Labor could be used against you in a criminal case.

If a police investigator or someone from the Department of Labor contacts you and wants to discuss a potential fraud case, you have a right to remain silent and a right to consult an attorney. If someone from the government tries to speak to you about overpayments, you should request an attorney and immediately contact a lawyer.