Unemployment Fraud

[Pennypiper93]

What is the name of your state (only U.S. law)? Maryland

I got laid off from my full time job in September, 2017 and collected unemployment until mid January 2018. Started new job on January 19th, 2018. During the time I was getting unemployment, I worked an on-call/as needed job one week out of the month. I typically made around $350 a month doing this. I always subtracted what I made from my unemployment pay, but I now know that I was not doing it correctly. Basically, instead of putting in what I earned that week, I put it in once I got it in my bank account. Sometimes if I knew I had gotten called in, I would estimate what I was going to make and subtract that. Bottom line is I did it all wrong.

Got a call from an agent a few weeks ago asking me about overpayment etc. She called me during my first day at new job so i can say I wasn't fully paying attention, but I told her i was just confused and had done it wrongly just out of misunderstanding.

Today, I got a letter saying that I committed fraud. It says I owe back $3,300 plus $1,000 in fraud fees. The letter says fraud means I willingly and knowingly committed this act

I honestly did not ever intentionally do all of it. I was stupid for not reading into all of it more and understanding how to do. The lady on the phone even told me there were 2 or 3 weeks where I underpaid myself. It was just stupidity on my end.

I wrote an appeal letter explaining all of this, that it was an honest mistake. I will pay back what I owe. My biggest worry is my new job. I trained for 6 weeks for this job. It is a government job with a secret security clearance. Will my job be made aware and/or find out about this? I fear if they see FRAUD they will for sure fire me.

I'm in my twenties, just married, just starting out. Not that that is an excuse, but this was my first time on unemployment and I really just didn't know what I was doing. I am so scared to lose this new position that I love so much.

 

[commentator]

In the first place, wait until you hear from your appeal. I cannot imagine that you did not take this very seriously, even if the person called you while you were on the job and were not paying attention. But what you need to do is figure out exactly how much overpaid or underpaid YOU believe you were. This is what you will want to appeal, what you need to know.

The sad thing is, you probably wouldn't have been overpaid a bit if you had only bothered to talk to someone and have them explain exactly how to report this part time work correctly at the time instead of assuming you were doing it right, or that they wouldn't notice or something. That was a serious mistake.

What you should have done was that each week, when you made the certification for your unemployment benefits, you should have answered Yes to the question "Did you do any work this week for which you were paid or will be paid?" on the week you worked it, Sunday through Saturday which is how all unemployment weeks are certified for, regardless of when you are paid. So if you worked weekends only, you'd report, on one week, the first day Sunday and the last day Saturday. You'd estimate the hours you worked, say 8 each day. You'd figure the hourly rate of your pay, the gross amount, not the net amount. So if you'd worked 16 hours in that Sunday through Saturday week, at $20 an hour, you'd report gross wages of $320 for that week. The system will do the calculation. If your weekly amount was more than $320, then that weekly unemployment check would be reduced by the amount that you were paid with the applicable allowances made. If you were to report more in gross pay for a week than your weekly benefit amount, you'd have had to re open your claim to certify for the next week.

But since unemployment insurance is not about your need or income, but totally about your having worked for wages, reporting the money as made during the week the NET amount went into your bank account was not the right way to do it. And since you didn't report the gross amount, it's quite possible you were overpaid, but without your input they'll try to determine this from checking what the employer has reported as what they paid you during which week. So what they're saying is that you lied some weeks, (by reporting no work when there was work) and this makes you totally ineligible for these weeks.

They're coming out with quite a wad of overpayment here, and are calling it fraud and attaching penalties because you very much were at fault by taking this so casually and guessing at how you were to report it. Perhaps they'll reconsider and think of dropping the fraud charge based on your appeal, but it's not terribly likely. You need to, as I said, sit down and figure out exactly how much you think you made, in gross wages, in which weeks, and how much unemployment you'd have drawn if you had reported things correctly. Hopefully you'll get another chance to talk to them soon.

Of course you want to claim ignorance and that you just didn't understand. But do accept that you were at fault by your failure to do the necessary homework on reporting income. Be very professional and helpful to them, express your willingness to take care of the problem as best you can, as soon as you can.

If they offer you a repayment program, do not overpromise. It's better to set up small regular repayments and keep them up until the money is paid back than to wildly overestimate what you can pay back and then have to re negotiate.

In my more than slightly experienced opinion, you do not have to worry about them charging you criminally with unemployment fraud, they are much more interested in getting the money back, particularly in a situation like this, where you did report some wages, you just reported them incorrectly, than they are in prosecuting you.

They are an agency, not the court system, and they are a closed system so no one outside the agency is going to find out this little issue you are having with them. You do not have to
confess on job applications unless you were to be actually charged and prosecuted, and in that case, you need to get an attorney at once. But that as I said, is very very unlikely to happen.

Except in one case that very really might happen that your employer would find out about it. If you ignore the unemployment agency, do not work with the fraud section and show no willingness to repay the money, they may very well take steps to garnish your wages. If this happens, your employer will find out about it in a very embarrassing way.

So think of this as a bad learning, try to retrieve as much of it as you can, in perhaps less of an overpayment, no fraud penalties, if this happens with the appeal, and no matter what, begin right away to start paying back the unemployment they determine finally that you owe them.

 

[adjusterjack]

I wrote an appeal letter explaining all of this, that it was an honest mistake. I will pay back what I owe.

If the fraud penalty is not rescinded you likely will have another level of appeal.

If that happens I suggest you read the following resources:

https://www.dllr.state.md.us/employment/uibpcfaqs.shtml

http://www.dllr.maryland.gov/uiappeals/decisions/8-1301.shtml

The second link is the important as it lists cases that address fraud. If you have to appeal to the next level you should carefully study the case decisions to see how they apply to you. You can google the cases that don't have live links.

 

[commentator]

You can appeal to every level allowed to you, but in reading the case law and in reading the information provided by the state of Maryland, I sadly fear that prior irresponsibility will preclude this claimant from having much grounds to appeal. What's she going to claim in an appeal, that they can't prove she reported it incorrectly? They can go back to the employer and get it exactly.

They also have a record of exactly what she did report, how she answered each question for each week.
If she says I didn't understand, the obvious question is why did you not read the material about reporting wages? It's pretty clear. Or why didn't you call and try to talk to someone about it? Did you at any time attempt such a call or contact?

I think she's just about going to end up paying it back with the fraud determination penalties and the one year sanction. The unemployment system is a little more sympathetic than the IRS, but ultimately, "I just didn't bother to read up or check up on how to do this correctly" is a very poor reason to misreport wages. It's hard to apply for unemployment benefits and go through the whole process and not understand or pick up on that whether or not you work is of paramount interest to them week by week as you are filing your claim.

The upside is, this person is now working again at a job she loves, and if she pays back her overpayment eventually, it will not be a big deal. It's like she received a loan with heavy interest that she can repay now that she is working again. The more she churns, denies, ignores, fights, argues, or hires an attorney to "fight for her" (Gosh I hate those commercials!) the more likely they are to see it as fraud that deserves to be made an example of.