DLLR Continues Crackdown on Unemployment Insurance Fraud

BALTIMORE - Maryland’s Department of Labor, Licensing and Regulation (DLLR) obtained 11 civil judgments during September 2009 in cases when courts determined that unemployment benefits were improperly applied for and received.

Furthermore, the department’s unemployment insurance hotline received 100 calls during the month requesting investigations for possible unemployment insurance fraud.

DLLR has established mandates to detect and prosecute unemployment insurance fraud. Infractions against these mandates are brought before the Maryland District Court system by the Department’s Benefit Payment Control Unit. The defendants face maximum penalties of ninety (90) days incarceration, fines of up to $1,000, or both, and the obligation to make full restitution of the illegally obtained benefits. In addition, civil judgments may be solicited to garnish wages of those who are now gainfully employed but were determined to have illegally or unethically received unemployment insurance benefits.

“We take no higher responsibility than being the guardian of the state’s money,” said DLLR Secretary Alex Sanchez. “At a time when the balance in the Unemployment Insurance trust fund is significantly reduced because of the recession, we need to make more certain than ever that benefits are getting to the people who need it the most.”

The Benefit Payment Control Unit employs a wide variety of fraud detection methods. These include, but are not limited to, computer ‘crossmatch’ programs that compare benefits paid to claimants with employee wages earned as well as employer contribution statements. The unit also uncovers fraud using employer inquiries; the Maryland and National Report of Hires - where all employers are required to report all new and rehired employees; anonymous reports; and tips from the Unemployment Insurance Fraud Hotline Action. The latter’s phone number is 1-800-492-6804.

DLLR’s Quality Control Unit seeks to ensure that only correct payments are made to those who apply for unemployment benefits. Random audits verify dependents’ status, employer separation, availability for work and work search contacts.

Claimants who willfully and knowingly fail to fully disclose accurate and complete information in order to obtain or increase unemployment insurance benefits may be charged with fraud under Maryland law. Such conduct can incur criminal prosecution and administrative penalties such as disqualification from receiving unemployment benefits in the future.

Updated September 11, 2009