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September 25, 2013
For Immediate Release: September 25, 2013 Contact: Julie Rabinowitz, 207-621-5009
Found guilty of collecting benefits while employed
AUGUSTA— Edward C. Spence of Perham, Maine was convicted on Sept. 24, 2013, of theft by deception for fraudulently receiving unemployment insurance payments.
Spence worked and earned wages while collecting benefits. He was sentenced to four years, all but 10 months suspended, with three years of probation, a condition of which is to pay restitution of $14,196.
“Obtaining benefits under false pretenses is a crime. It takes money away from people who are genuinely in need,” said Governor Paul R. LePage. “Furthermore, unemployment fraud burdens the businesses that pay taxes to fund benefits.”
“Unemployment benefit fraud involving principal amounts of $1,000 or more are considered felonies under Maine law, and the department is aggressively moving felony cases to prosecution,” noted Commissioner of Labor Jeanne Paquette.
In 2012, a total of 15 cases were referred to district attorneys for prosecution, resulting in five convictions. In the first six months of 2013, the department referred 83 cases to the district attorneys. To date this year, claimants in nine cases have pleaded guilty or been found guilty after trial. In addition, 11 claimants paid off their overpayments totaling $93,738 after the department notified them that their cases were moving toward prosecution.
Commissioner Paquette explained what constitutes fraud. “For people claiming benefits, unemployment insurance fraud usually involves someone misrepresenting information to qualify for benefits,” she said. “In this case, an individual continued to claim benefits after returning to work. In other cases, individuals might report that they are looking for work when they are not, or they might report having contacted employers in their search for work that they did not actually contact. Some may file claims under false pretenses.”
“In the past year, we’ve improved several of our reporting systems so that we can get information more quickly from employers and perform better cross-matches against employment and hiring databases,” Commissioner Paquette said. “This is helping us identify potential fraud more quickly. We are taking fraud prosecution and prevention seriously.”
To identify when people receiving benefits are hired for permanent work, the department cross-matches the list of active claimants against the National Directory of New Hires and against employer-reported quarterly wage data.
On the employer side of the unemployment system, fraud includes intentional misclassification of employees as independent contractors, misreporting worker wages to avoid payment of unemployment taxes and “SUTA dumping,” a rate manipulation practice for obtaining a lower tax rate than a company’s unemployment experience would otherwise allow.
The Department of Labor actively pursues the collection of benefit overpayments and any associated fines and interest. The collection process usually begins with by contacting claimants to request repayment or establish a repayment schedule. However, the department regularly uses state income tax filings and lottery winnings to offset money owed. The department garnishes wages when other collection methods prove unsuccessful.
Citizens can report instances of suspected unemployment fraud by phone, email, fax or mail; information is available at www.maine.gov/labor/unemployment/fraud.html . Tips can be kept confidential.