Cumberland County Man Admits to Committing Unemployment Fraud Bookmark and Share

June 16, 2014

Collected benefits while employed

For Immediate Release: June 16, 2014 Contact: Julie Rabinowitz, 207-621-5009

AUGUSTA— John Willis of Cumberland Center, Maine was convicted on May 8, 2014, of theft by deception for fraudulently receiving unemployment insurance payments.

Willis, age 56, worked and earned wages while collecting benefits. He was sentenced to 48 hours in the Cumberland County Jail and ordered to pay restitution of $15,159.

“Collecting unemployment benefits under false pretenses is a crime. It takes money away from people who are genuinely in need,” said Governor Paul R. LePage. “Furthermore, fraud burdens the businesses that pay the unemployment taxes that provide the benefits. The Department of Labor has implemented new ways of identifying fraud and is actively referring cases to the District Attorneys for prosecution.”

“Unemployment benefit fraud involving principal amounts of $1,000 or more are considered felonies under Maine law. We are 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 2013, the department referred 88 cases. To date this year, the department has referred 23 cases.

The Department of Labor actively pursues the collection of benefit overpayments and any associated fines and interest. The collection process usually begins by contacting claimants to request repayment or establish a repayment schedule.

In April and May combined, the Department of Labor recovered more than $1.5 million of improper payments. More than $30,000 was received from repayment through court prosecution; additional money was recovered from wage garnishments, offset of unemployment benefits, intercepts of federal and state tax returns and voluntary payments by debtors.

“Fraud prosecution and prevention is a priority for the department. In the past two years, 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 databases to identify potential fraud more quickly,” Commissioner Paquette said.

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.”

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.

Citizens can report instances of suspected unemployment fraud by phone, email, fax or mail; information is available at http://www.maine.gov/labor/unemployment/fraud.html . Tips can be kept confidential.

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