Two local cases shine a spotlight on unemployment fraud
by Marcus E. Howard
September 25, 2011 01:27 AM | 13031 views | 9 9 comments | 12 12 recommendations | email to a friend | print
MARIETTA — The Georgia Department of Labor has uncovered 634 cases of unemployment insurance fraud since January, an indication that some individuals are willing to take advantage of any means they can in an economy plagued by joblessness.

Department officials say there are always people who attempt to defraud the state’s unemployment insurance system, designed to provide temporary income for unemployed workers. But they acknowledge that there has been an increase in the number of fraud cases.

Georgia recently teamed up with a handful of other states to crack down on unemployment fraud. Nationwide, it’s estimated that those fraudulently drawing unemployment payments who were never eligible for the program and who continue receiving checks after they return to work, swindled $17 billion in 2010.

Last year, the state discovered nearly $5 million in fraudulent payments. So far, it has recouped more than $1.4 million of that amount, Georgia Public Broadcasting reported.

“Anytime someone tries to defraud the unemployment insurance system we consider it to be a major program, whether it’s a case for $500 or $5,000; it’s important to prevent that to protect the solvency of the unemployment insurance trust fund,” said state Labor Department spokesman Sam Hall.

“We take every case seriously and if we catch someone trying to defraud the system, we are going to deal with them to the extent that the law allows.”

When the labor department suspects a fraud, it first attempts to make a repayment arrangement with the individual that includes a 10 percent penalty fee based on the fraud amount in question and an additional one percent fee of accrued interest on the unpaid balance.

If the individual is unresponsive, then the department pursues prosecution.

Under Georgia law, a fraud amount that is less than $4,000 is a misdemeanor and carries a fine up to $1,000 and/or up to 12 months in jail. More than $4,000 is considered a felony and carries a penalty of a $1,000 or more fine and/or up to five years in prison.

“People have gone to jail for committing unemployment insurance fraud,” Hall stated.

To date this year, 265 arrest warrants have been issued at the request of the labor department against fraud suspects.

Here in Cobb County, authorities charged Paulton Warren Johnson, 39, of Acworth, with felony false info-unemployment insurance for allegedly making a “false representation to obtain unemployment insurance benefits” to obtain $19,372 in benefits last July, a criminal warrant stated. He was released from the Cobb jail on a $5,000 bond.

Eric Von Mack, 47, of Marietta, was charged with the same crime after authorities accused him of fraudulently obtaining $3,310 in benefits in August, according to a criminal warrant. He was released from jail on a $1,000 bond.

“Most of the fraudulent claims are for receiving unemployment and failing to report earnings or they lie about their availability for the unemployment insurance when they certify each week for the unemployment check,” said Sheila Jones, the labor department’s benefit payment control manger.

It’s not uncommon for department investigators to get tips about fraud from suspects’ family, friends and coworkers. However, it mainly uses a system that cross checks wage records with unemployment benefit receipts. The funding for unemployment insurance benefits comes from taxes paid by employers.

“We’re continuously running cross matches between payroll taxes paid and unemployment insurance benefits paid, to see if there is a match for a period of time in which the social security number will show up in both reports,” Hall said.

“If that’s the case, then we know to look into it.”

Georgia, Ohio, Colorado, New Jersey and Utah have developed a web-based system to share unemployment insurance information with states, multistate employers and others to address. States were given a Sept. 30 deadline to submit plans to the federal government on how they plan to curb the costly problem of improper payments to people who have returned to work.
Comments-icon Post a Comment
Common practice
September 26, 2011
It is common practice for people to defraud the governement not thinking at all that you are ripping off your friends who pay taxes! Half of the free breakfast and lunch recipients at the schools do not qualify. The schools claim there is no way to check if the information is ture. We should not offer programs with out being able to check. It is disgusting and you should turn your friends into the governement if you know they are commiting fraud!
Pam J
September 26, 2011
I want everybody to remember that unemployment money does not come from taxes. All companies pay into the plan. But that one guy got $3,310 for the month of August? I didn't think anybody could get over $800 a week. I have been getting unemployment pay since April of 2010. I flat out cannot find any kind of job. Until the job market gets a lot better, I ask that nobody criticize those of us who are getting unemployment. I hate it. My credit score has dropped 153 points in three months. If you have a job, rejoice about that fact.
September 26, 2011
This is ridiculous. Shame on them. Shame on everyone who is taking advantage of the government just because they can. Shame on a family I know collecting food stamps - they are a family of 3 adults and one child. Shame on my friend who gets free lunch for all her kids but at the same time goes on luxurious vacations about 3 times a year. If they would even stay home for one of those vacations they could pay for their kids' school lunches for the year. No one in this country would starve to death or die if all these ridiculous "benefits" were doen away with. The government has got to quit extending these benefits because it is crippling our nation.
September 25, 2011
And to think ongress keeps voting to extend these payments. Last time I checked it was up to what 2 years now? What a freaking joke!
September 25, 2011
Great article. Sheds a lot of light.
Stop it now
September 25, 2011
Until the government is able to prevent fraud like this, then I think we should save our money and not give it to anyone.

The fraud continues....
September 25, 2011
Government is simply unable to run programs envolving taxpayers money without being scammed.

Unemplyment insurance should be an individual responsibility like any other insurance.
September 25, 2011
Sheila, your Dad Joe would be proud of you.

Keep up the good work.
September 25, 2011
The whole unemployment system is a fraud. Over 60 percent of the applications are based on false applications. Why do the job creators have to pay for these parasites? Lets end this liberal Obama scam now.
*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, and spam will also be rejected. Please read our terms of service for full guides