Cumberland County Man Pays Unemployment Fraud Restitution of $26K Bookmark and Share

October 6, 2014

For Immediate Release: October 6, 2014
Contact: Julie Rabinowitz, 207-621-5009; cell: 207-557-1483

Collected benefits while employed

AUGUSTA— Thomas J. MacDonald of Portland, Maine was convicted on Sept. 22, 2014, of theft by deception for fraudulently receiving unemployment insurance payments. Unemployment benefit fraud involving principal amounts of $1,000 or more are considered felonies under Maine law.

MacDonald, age 41, worked and earned wages while collecting benefits. He was sentenced to 48 hours in the Cumberland County Jail and ordered to pay restitution of $25,820.25. The Department has received his restitution.

“The Department of Labor has been effective in increasing the conviction rate of people committing unemployment fraud,” said Governor Paul R. LePage. “Although some may say that fraud in our systems is ‘anecdotal,’ we know that obtaining benefits under false pretenses is a crime. Unemployment fraud takes money away from people who are genuinely in need and burdens the businesses that pay the unemployment taxes that fund the benefits.”

“We continue to move felony cases to prosecution,” stated Commissioner of Labor Jeanne Paquette. “We want to send a strong message that fraud will not be tolerated. To date in 2014, the amount of fraudulent payments we have recovered through prosecution totals more than $167,000, and 79 fraud cases are pending with DAs.”

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. By improving our reporting systems, we get information more quickly from employers and perform better cross-matches against employment databases,” Commissioner Paquette said. “Once identified, we can recover the funds through prosecution, wage garnishments, offset of unemployment benefits, intercepts of federal and state tax returns and lottery winnings and voluntary payments.”

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.

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.

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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