It Adds Up

6752086 - filling the unemployment insurance application form isolated in blue

The Federal Unemployment Tax Act (FUTA) mandates that employers pay unemployment taxes into a trust fund for workers who find themselves out of a job through no fault of their own. Employers also pay a state unemployment tax. (Suffice to say, unemployment insurance, which is not funded by taxpayers, is expensive for employers.) Today’s fraudster is a Peru, Indiana woman who tried to moonlight by working another job, while simultaneously receiving unemployment insurance benefits from the State of Indiana.

A Department of Labor report shows that between 8 and 9.99 percent of unemployment insurance payments made in Indiana during a three-year period ending June 2016 were improper. Let’s put this into perspective.

As of October 2017, the Bureau of Labor Statistics reports that Indiana had 128,700 unemployed workers. Since the maximum weekly payout that Indiana makes to an unemployed worker is $390 per week, that means that a maximum of $50,193,000 could be paid out per week in unemployment benefits. If the rate of improper payments still stands, it is possible that improper payments between $4 million and $5 million could be made each week. (Obviously, not everyone would be eligible for the maximum amount of benefits due to the amount of salary earned; however, you get the picture. Every little bit adds up to a lot.)

The Hoosier at the center of today’s case was caught in a ruse when the Indiana Department of Workforce Development (DWD) examined wage reports and new hire data for the state’s employers. (The agency uses this data to make sure those who are collecting unemployment insurance benefits deserve them.) An investigation determined that she was working and earning wages from a new employer, while claiming and receiving unemployment insurance benefits.

The 45-year-old double dipper pleaded guilty to unemployment insurance fraud. She was sentenced to one year of probation and ordered to repay Indiana’s DWD $8,220 for the fraudulently collected benefits.

Today’s article reports that over the last three years, Indiana state courts have required fraudsters to repay more than $8.5 million in restitution to the state’s Unemployment Insurance Trust Fund. This fund helps to ensure those who qualify for unemployment insurance benefits actually receive them. (Unemployment insurance is not intended to be a secondary source of income.)

You can help battle unemployment insurance fraud and abuse by contacting your state government’s labor division. (The U.S. Department of Labor has a list of contact information for each state here.) Your efforts can preserve your state’s trust fund by making sure that employer-paid taxes are spent wisely. (And you don’t even have to identify yourself when making a fraud report. It can’t get much easier than that.)

Today’s “Fraud of the Day” is based on an article entitled, Miami County Woman Pleads Guilty to Unemployment Insurance Fraud,” published by the Indiana Department of Workforce Development on October 16, 2017.

INDIANAPOLIS (October 16, 2017) – Peru resident Tina D. Collins, 45, pled guilty to unemployment insurance fraud in Miami County Superior Court 2 on September 28, 2017. Through the use of agency records, an Indiana Department of Workforce Development (DWD) employee began an investigation and determined that Collins was working and receiving wages while claiming unemployment insurance benefits.

Collins was sentenced to one year of probation and ordered to repay DWD $8,220 for the benefits she fraudulently collected.


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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.