Unemployment Insurance Fraud
What is unemployment insurance fraud?
Unemployment insurance payments help people who lose their jobs keep their heads above water while they look for new employment. Obtaining unemployment compensation unlawfully is considered unemployment insurance fraud.
This offense is defined in California 2101 UIC and can be charged as either a misdemeanor or felony depending on the amount of unlawful compensation received. In some cases, a defendant may arrange to pay restitution in exchange for the EDD not filing criminal charges.
Obtaining unemployment benefits unlawfully is considered unemployment insurance fraud.
Unemployment insurance (UI) helps people who lose their jobs through no fault of their own collect an income as they try to keep their heads above water and look for new employment. The Employment Development Department (EDD) oversees California’s UI program.
This offense is defined in California 2101 UIC. Under certain circumstances, UI fraud may be charged as a violation of California 550 PC, which covers a wider range of insurance fraud.
Elements of the crime of unemployment insurance fraud
To obtain a conviction for unemployment insurance fraud under 2101 UIC, the prosecutor must prove beyond a reasonable doubt that the defendant:
Willfully made a false statement or representation; and/or
Knowingly failed to disclose a material fact; and/or
Used a false name, social security number, or other false identification in order to
Obtain, increase, reduce, or defeat any benefit or payment for
Themselves or anyone else.
Examples of unemployment insurance fraud
UI fraud examples include:
Failing to report income from a part-time job while collecting UI benefits.
Going back to a job or getting a new job and continuing to claim UI benefits without reporting the job and income.
Doing temp work while receiving UI benefits without reporting the earnings.
Withholding or giving false information when initially applying for UI benefits or submitting periodic certifications for ongoing benefits.
Since many fraud cases also involve theft, forgery, and/or perjury, the prosecution may file additional charges, or other charges instead of UI fraud. Examples of common related offenses include:
470 PC – Forgery
118 PC – Perjury
472 PC – Forgery, counterfeiting, or possessing a fraudulent public seal
Criminal penalties for unemployment insurance fraud
Most California fraud offenses are wobblers, which means they can be prosecuted as either a misdemeanor or a felony depending on the facts and circumstances, plus any prior criminal history of the accused.
If convicted of violating 2101 UIC as a misdemeanor, the defendant may be sentenced to up to one year in county jail and a maximum fine of $20,000. If convicted of a felony, the sentence can range from 16 months to three years in state prison and a fine of up to $20,000.
If a defendant is instead convicted of general insurance fraud under 550 PC, the amount of the fraud determines whether the offense is a misdemeanor or a felony. Fraud of $950 or less is a misdemeanor punishable by up to six months in county and jail and a fine of $1,000 maximum.
But if the fraud exceeds $950, the offense is a wobbler. For a misdemeanor under 550 PC, the defendant may be sentenced to up to one (1) year in county jail and a fine of up to $10,000.
If the amount of the fraud is more than $950 or totals $950 in any consecutive 12-month period, the offense is a felony. A felony conviction under 550 PC carries any or all of the following penalties:
Two to five years in prison; AND
A maximum $50,000 fine OR double the amount of the fraud, whichever is greater.
In addition, there are potential non-criminal penalties for a defendant convicted of UI fraud. These include:
Professional discipline, such as suspension or revocation of a license.
Repayment of benefits plus a 30% penalty.
Ineligibility to receive any UI benefits in the future.
Forfeiture of future tax refunds to repay benefits.
Legal defenses to unemployment insurance fraud
Due to the wide range of defenses available to fight accusations of UI fraud, seeking the advice of a qualified defense attorney is critical. In some cases, a defendant may arrange to pay restitution in exchange for the EDD not filing criminal charges. Because of this possibility, retaining a skilled attorney can significantly improve one’s outcome.