Unemployment Insurance Fraud Attorney
If you have been charged with unemployment insurance (UI) fraud, you could be subject to serious penalties. Depending upon the circumstances you may be facing a felony charge. Unemployment fraud cases can involve an employee or an employer. In either case, the prosecution will involve allegations of intentional misrepresenting your status or the numbers or facts you provide to the government. This can be a complicated matter, and you should have an experienced Phoenix fraud attorney to represent you. If you are facing an unemployment fraud charge contact The Feldman Law Firm for a free consultation.
What is Unemployment Insurance Fraud?
The crime of unemployment fraud is defined in Title 23 of the Arizona Revised Statutes, which covers matters related to labor and employment. As noted above, the laws cover fraud by both employees and employers.
Employee Unemployment Fraud
Under A.R.S. 23-785, you can be charged with unemployment fraud if you make a false statement or representation, knowing that the statement is false, or fail to disclose a material fact, with the intent of increasing unemployment benefits for you or another person.
There are many different ways to violate the statute as an employee. Here are just a few of them:
- Failing to report finding a job while still on unemployment.
- Working “off the books” while receiving unemployment benefits.
- Providing false and/or misleading information on an unemployment application, such as overstating your income.
- Using someone else’s name (or a fictional name) or other false personal identifying information when applying for benefits.
- Telling the unemployment office that you are actively looking for a job while failing to take steps to seek employment.
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The charge in these cases is a class 6 felony. A recent report showed that there during the last quarter of 2019, there were dozens of convictions for unemployment insurance fraud. The most common penalty was court-ordered repayment of the amount wrongfully received, together with interest and penalties. While jail time was rarely imposed, most of those convicted were sentenced to years of probation. Many also had to perform between 20 and 60 hours of community service.
While the state obtains numerous convictions against employees for unemployment fraud, the fact is that many of those charged are not convicted. The reasons vary, but often the state is unable to prove the requisite criminal intent to support a finding of guilt beyond a reasonable doubt.
Employer Unemployment Insurance Fraud
In most cases, unemployment insurance is funded by the employer through employment taxes. The tax rate varies from employer to employer based upon the amount of money paid for benefits to (former) employees of the employer. Another way of saying this is that cost of unemployment taxes paid by an employer is “experience-rated.” Employers can be accused of unemployment fraud by doing any one or more specific acts, including, but not limited to, the following:
- Falsely classifying workers as independent contractors rather than employees. Unemployment taxes are not due on payments made to independent contractors.
- Failing to report wages paid to employees, including payments made “under the table.”
- Giving false information to the Arizona Department of Economic Security concerning the reasons for the termination of an employee.
False statements by employers in an effort to avoid or reduce the amount of unemployment contributions is a class 3 misdemeanor.
Defenses to Unemployment Fraud Charges
The most important thing to recognize about unemployment charges is that even though the evidence against you is usually in the form of documents, financial records or other writings, a false statement alone is not enough, in and of itself, to support a conviction. In each case, it is necessary that the prosecutor show criminal intent. There is no such thing as “accidental” UI fraud. If you’ve made an honest mistake, whatever consequences may flow from it, will not amount to UI fraud.
If you have been charged with unemployment fraud call The Feldman Law Firm. We offer a free consultation, and we will provide you with an honest evaluation of your case.