From the Maine Department of Labor:
AUGUSTA—Residents of Sedgwick, Calais and Bangor have each been convicted on separate charges of fraudulently collecting unemployment insurance. Unemployment benefit fraud involving principal amounts of $1,000 or more is a felony under Maine law.
“Although some may say that fraud in our benefit systems is ‘anecdotal,’ my administration knows that this crime diverts resources from the people who need them,” said Governor Paul R. LePage. “The Department of Labor has consistently worked over the past five years to improve the conviction rate of people committing unemployment fraud, preserving the benefits for people who are trying to get back to work. Ignoring fraud would burden Maine businesses by forcing them to pay higher unemployment taxes to fund the fraudulent benefits.”
Kristen Rodge of Sedgwick was convicted on Apr. 9, 2015, of theft by deception for fraudulently receiving unemployment insurance payments and of unemployment fraud by making a false statement in her claim. Rodge, 49, worked and earned wages while collecting benefits. For the first count, Rodge was sentenced to 10 months in prison, suspended, and two years of probation. She was sentenced on the second count to 120 hours of community service to be performed during the period of probation. She was ordered to pay $3,500 in restitution, although the total amount of the original theft was $9,974.
Sean Stinson of Calais was convicted on Mar. 9, 2015 of theft by deception and unemployment fraud for collecting unemployment insurance payments while working and earning wages. Stinson, 43, was sentenced to 9 months, all but 45 days suspended, and for the second count he was given 30 days concurrent with the first count with one year probation applicable to both counts. He was ordered to pay $7,882 in restitution.
Scott Hunt of Bangor was convicted on July 24, 2013 of theft by deception for fraudulently receiving unemployment insurance payments while working and earning wages. Hunt, 41, faces a sentence of 7 days of incarceration, concurrent with an operating after suspension sentence, with a deferred disposition. He has been ordered to pay $1,077 in restitution.
“We will not tolerate unemployment fraud,” stated Commissioner of Labor Jeanne Paquette. “Our investigators continue to identify and move felony cases to prosecution. To date in 2015, we have had 22 convictions and recovered through prosecution more than $67,000 in fraudulent payments with an additional $6,473 in penalties and interest; 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; in 2014, the department referred 84 cases with 34 convictions to date.
“Fraud prosecution and prevention is a priority. We continuously improve our reporting systems, obtaining information more quickly and identifying potential fraud earlier than ever before,” Commissioner Paquette said. “Once identified, we can recover the funds through voluntary payments, prosecution, wage garnishments, offset of unemployment benefits and intercepts of federal and state tax returns and lottery winnings.”
The commissioner explained what constitutes fraud. “For people claiming benefits, unemployment insurance fraud usually involves someone misrepresenting information to qualify for benefits,” she said. “In these cases, individuals 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, the national wage records database 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 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 www.maine.gov/labor/unemployment/fraud.html . Tips can be kept confidential.