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October 06, 2010

 

DiNapoli: Auditors Find Nearly $1M in Improper and Fraudulent Unemployment Insurance Payments

Payments Made to Deceased Individuals

State Comptroller Thomas P. DiNapoli identified nearly one million dollars in unemployment insurance benefits that either did not comply with federal and state laws or regulations or were processed in error, including payments to 14 deceased individuals, according to a report released today.

“Times are tough,” said DiNapoli.  “Every dime counts, especially when they’re taxpayer dimes.  Unemployment insurance is supposed to help New Yorkers get through difficult times.  It’s not supposed provide a way to rip off the system.  The New York businesses that pay for unemployment insurance can’t afford to subsidize a scam.”

According to DiNapoli’s audit, which covered the period April through December of last year, the state Department of Labor (DOL) found that 14 individuals collected $12,268 in unemployment insurance benefits by certifying a claimant’s eligibility after the claimant had already died.  In addition, one claimant admitted falsifying documents to collect $3,939 in benefits, and another certified nine times he was unemployed to collect $4,398, even though he was in fact employed.

“Last year, DOL saved businesses more than $35 million through UI fraud enforcement,” said State Labor Commissioner Colleen C. Gardner.  “UI is a safety net that is there for people who need it during times of economic hardship.  To think that people would go to such lengths to collect UI when they don’t even need it is simply unbelievable.  DOL paid over $10 billion in benefits over a recent one year period, and we have a number of tools in place to prevent, detect and recoup fraudulently collected benefits. I thank Comptroller DiNapoli for his assistance in helping us identify $1 million more in fraudulent UI claims and look forward to working with his office to root out even more fraud in the future.”

The findings are part of DiNapoli’s ongoing examination of unemployment payment requests, which DOL processes.  DiNapoli’s office stopped $71,907 in current payments and DOL took corrective action based on auditors’ findings and prevented $247,841 in overpayments.  In addition, by matching the DOL Unemployment Insurance Benefit Overpayment Accounts Receivable file to the state payroll, DiNapoli’s auditors helped to recover $355,102 in unemployment benefits overpaid to state employees.  DOL continues to pursue recovery of over $295,000 in other Comptroller Office findings.

DOL officials agreed with DiNapoli’s recommendations and have pursued recovery of overpayments, including sending overpayment collection letters to claimants, referring cases to the Department of Taxation and Finance for collection under the State Withholding Offset Program and referring cases to the Attorney General’s Office for prosecution.  In addition, DOL has begun working with the Federal Government to recapture overpayments by using Federal Tax Refund Offsets.

Click here for a copy of the report: http://www.osc.state.ny.us/audits/allaudits/093010/2009bse3a004.pdf.

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