Unemployment Benefits Stopped & Accused of Fraud

[lynda2901]

What is the name of your state (only U.S. law)? North Carolina is my state.
I was laid off from my job in July 2009. I was collecting unemployment benefits and doing what was required by the Unemployment Commission, seeking employment, keeping a record of job searches, and not receiving any wages.
After months with no job offers my sister and I decided to do a business venture of opening up a pet retail store as a partnership. We both agreed that we would have to work other jobs until the store made enough of a profit to make any kind of a salary. We had family members who were going to work shifts at the store without pay until either of us could work at the store full time and make some kind of salary.
I continued my job search 2-3 days a week, keeping a record of each one, and worked at the store the other days with NO pay.
I was contacted by the Unemployment Commission and told I was committing fraud by owning a business and collecting benefits. I was also told my benefits had stopped and I had to pay back all of the weekly benefits I had received so far.
I had a conference at the local unemployment office and produced all my job searches, bank statements, and profit and loss statements from the store. It showed I was looking for a job, made no wages, and had no profit from the store.
My question is can they stop my benefits and demand I pay back all the benefits I have received if I was doing what they required me to do?

 

[commentator]

Can they? Uh, yes. Is it legal for them to investigate what appears to them to be fraud, and was probably reported to them by someone as you running your own business, working and drawing benefits. You bet! They called you in with this first letter, telling you they believe you are committing fraud, and that you can be required to pay back all the benefits you've received, and even prosecuted criminally if the circumstances warrant it upon investigation.

But when you went down and talked to them, submitted all the information about how much you were making, your availability for other work, your continuing job search activities...this was part of their investigation.

In other words, they sent you a notice that they believed you were doing this, and you came in and talked to the investigator, and submitted your documentation about your eligibility. Have you, since then, received a decision that your activities did involve u.i. fraud?

Have you been told, since you submitted this proof, that you did commit fraud, that you will be considered overpaid and that all your monies that you had received will be an overpayment? If so, there is going to be another appeal associated with the notice of overpayment. As you are presenting this, it does not sound like this investigation will determine true fraud. It sounds as though you met the requirements to do some self employment which did not remove you from the labor force and you would probably have been eligible for unemployment even while doing this.

But oh yes, if they determined you were actually committing fraud by working and drawing benefits at the same time, they most certainly could declare you ineligible for further benefits, and demand backpay for the benefits you have received in the past. It will definitely be their call whether you were 'doing what they told you to do.'

 

[lynda2901]

After the conference, I did get a letter from the Unemployment Commission, that they did find me guilty of fraud and demanded repayment of all benefits.
I filed an appeal along with a letter explaining what I was doing and have not heard back from them. It has been almost 6 months.
Yes, it was my former employer who laid me off that insisted I was committing fraud and contacted the unemployment office. The fraud investigator told me he knew I did nothing wrong when he saw all my job searches, bank statements, and profit and loss from the store. He as much as said he felt it was a issue of my former employer being jealous that I opened up a business like the one she has and felt I was going to be competition.
The job I worked at before getting laid off was a non profit pet store. I was the store manager. The day I was laid off the director (boss) told me she wanted me to volunteer at the store (without pay) and do exactly what I did while I was on salary while collecting unemployment and help run the store.
I just recently got a part time job, but feel that I was still entitled to benefits up until now.

 

[commentator]

So they did stop your benefits after the hearing, but then you haven't heard anything back from them in six months, huh? I'd say they probably aren't going to push the repayment issue, then.

But it does sound as though you have been busy enough with your private work that you probably wouldn't technically have been eligible for the extensions.

Availablility would have been an issue. It sounds as though the new business was keeping you pretty busy. I'd say you came out well if you don't have to pay the money back. Six months (26 weeks) of unemployment woud have been the most regular unemployment you would have been able to draw from your employer under any circumstances.

The extensions that have been in effect for the last couple of years are federal. But your first little stint of unemployment did cost your former employer's business in tax money, so they would be very diligent to report you to the unemployment office if they thought you weren't eligible, were comittting fraud. And when you filed for the extensions, even if you hadn't been stopped for suspected fraud, you'd have had availability issues.

When you sent back in that appeal, you should have gotten something about the status of your claim a few days later. It would have told you if your appeal was denied or approved, whether you were able to re-open your claim at that time. When you didn't receive it, did you ever call and check?

But after six months, if you didn't receive any further information or any further decision about your eligibility and you didn't call and try to find out if you could start back drawing, what had happened after you talked to the investigator, it's pretty doggone late to do so now. You may want to look up the status of your claim on the state website, if it still says it was stopped due to fraud, then at this late date, I'd say you've missed the bus on appealing it by a bit.

 

[lynda2901]

I appreciate all your advise, thank you.
The appeal was for the fraud charges and it had nothing to do with me still collecting unemployment benefits at that time.
I have always been ready and available for work since the day I was laid off. I know I own a business, but with no wages from this business yet, I have to have a paying job, which I just got a couple of weeks ago.
I agree with you, not to rock the boat if they have not contacted me by now and hope that they realize I did not commit fraud.