August 26, 2014
FOR IMMEDIATE RELEASE: August 26, 2014 Contact: Julie Rabinowitz, 207-621-5009
Collected benefits while incarcerated
AUGUSTA— Joshua Harwood of Georgetown, Maine was convicted on July 30, 2014, of theft by deception for fraudulently receiving unemployment insurance payments.
Harwood, age 35, filed for benefits although he was not able and available for work. He was sentenced to two-and-a-half years in Maine State Prison with two years of probation all but 30 days suspended and must pay restitution of $9,212.76.
“Our recent fraud convictions send a strong message to people who abuse our unemployment system,” said Governor Paul R. LePage. “Unemployment fraud hurts the safety net that protects workers who are laid off through no fault of their own. Fraud burdens the businesses that pay unemployment taxes to fund the benefits. Keeping money in the trust fund lowers taxes and preserves the benefits for people who need them.”
Commissioner of Labor Jeanne Paquette stated, “Our unemployment system is successfully using the tools we have available to identify fraud to investigate and refer cases to district attorneys for prosecution. Unemployment benefit fraud involving principal amounts of $1,000 or more, are considered felonies under Maine law.”
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.
To date in 2014, the amount of fraudulent payments recovered through prosecution totals more than $87,000, with about $23,000 having been collected in August alone, and 92 fraud cases are pending with district attorneys. The recovered fraudulent payment amount for all of 2013 totaled $67,501. 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.
“Fraud prosecution and prevention is a priority for the department. In the past two years, we’ve improved our reporting systems. We now receive information from employers faster and perform better cross-matches against employment and other databases, including people who are incarcerated, to identify potential fraud. These efforts are paying off and send a strong message,” 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. “Some people continue 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.