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By the numbers
Here’s a look at money recovered from unemployment insurance fraud:
2007 – $2.8 million
2008 – $3 million
2009 – $3.69 million
2010 – $2.54 million
2011 – $1.34 million (first half of the year)
Source: Indiana Department
of Workforce Development
Photo illustration

State targets jobless fraud

Aiming at those taking unemployment payouts while still employed

The offenders often have full-time jobs, but apparently consider their pay a pittance.

They deliberately choose to stay on the state’s unemployment rolls – claiming millions of dollars of unemployment benefits in their attempt to balance the scales of salary justice.

Those who falsely claim jobless benefits might feel like they’re robbing the rich to feed the poor, but state officials say Indiana isn’t Sherwood Forest.

And while the exploits of these offenders might make for lively dinner-table conversation, but they make a lousy defense when it comes to fraud charges. The Indiana Department of Workforce Development has caught more than 135 people since 2006, resulting in 62 felony convictions – including 14 so far this year.

“Most of these are people already working full-time, but feel like ‘I’m not making enough money at this job, so I’m entitled to unemployment,’ ” said Joe Frank, department spokesman. “To them, it’s like someone else’s money.”

In July, more than 264,000 people were out of work in Indiana with 87,129 of them collecting unemployment checks. The state provides 26 weeks of jobless benefits, but after that the federal government kicks in an additional 47 weeks of payments.

To qualify for the maximum weekly benefit of $390, an unemployed Hoosier must have earned at least $41,148 the year prior to becoming jobless. Companies are footing the bill for unemployment insurance, assuming the assistance is helping those out of work.

State officials say that kind of trust deserves protecting, which is why the Department of Workforce Development has stepped up efforts in recent months to make it known that scofflaws will be tracked down.

In fact, one of the first things visitors to the agency’s website see is the word “Busted” emblazoned in red letters. A link lists recent unemployment fraud convictions.

The campaign comes even though at least one workers’ rights organization leader says some people who have lost jobs have been improperly denied benefits.

Even so, the Workforce Development staff is on a mission.

“Before he left for the private sector in May, our previous commissioner, Mark Everson, wanted to make the public aware of what we were doing to stop this kind of activity,” Frank said.

Everson, who left to accept a leadership position in Houston with a tax services firm, decided to implement a media push before his departure. It was a tactic he learned while part of George W. Bush’s administration as commissioner of the Internal Revenue Service.

The idea is that showing the consequences of trying to cheat the system will deter the activity.

“I know I would be embarrassed if my name and mug shot was on a government website for unemployment fraud,” Frank said. “(Everson) did something similar at the IRS and wanted us to take the same approach.

“People look at the website and see that it’s a big deal to say you’re unemployed and you’re working. It’s a felony.”

Besides paying back tens of thousands of dollars, first-time offenders must contend with other penalties including multiple years on probation and of course a permanent criminal record as a felon.

That is the case for Suzie Quinones of Huntington. In June, Workforce Development reported her as the only northeast Indiana resident in the last year convicted of unemployment insurance fraud. She must repay nearly $46,000.

Quinones, though, said most of that money is fines and associated fees she feels are excessive.

The former auto supplier employee also said she didn’t deliberately attempt to defraud the state.

“I blame my job more than the state,” said the 53-year-old who lost her position of 34 years. “We were being laid off and called back (repeatedly), which is how this happened. It took them five years to tell me.”

Quinones could face four years in prison if caught violating the terms of her probation.

“It’s not worth it,” Frank said.

And it’s easy to get caught, considering people must use their Social Security numbers to get a job.

“It makes you wonder why anybody would try to do it,” Frank said.

Workforce Development Commissioner Scott Sanders intends to keep the heat on.

“I am definitely interested in continuing our efforts to publicize cases of unemployment insurance fraud,” Sanders said in a statement. “We want Hoosier employers to know we work hard to be good stewards of their money and to make sure these funds only end up in the hands of those truly in need. We also want folks to be aware we have many tools to detect fraud.

“We will catch you if you break the law and you will be punished.”

Maurice Emsellem is a policy co-director with National Employment Law Project in New York. He said the government needs to be more balanced in its pursuit of alleged violators.

“A lot of effort goes into tracking these people down,” Emsellem said. “Sometimes there’s a rush to judgment. It’s still very uncommon for the unemployed to commit fraud, compared to mistakes that are made denying people who should have the benefits.”

For example, Emsellem said that in 2010 jobless individuals nationwide were improperly denied or shortchanged $2.4 billion in unemployment insurance, while just $1.6 billion accounted for fraud that year.

“People who are often entitled to their benefits are getting caught up innocently in these overpayment proceedings,” he said. “The government needs to (help them) with the same kind of vigor they do with unemployment fraud.”