DLT recovers $4.6M in UI benefits scams so far this year

The R.I. Department of Labor and Training has recovered more than $4.6 million so far this calendar year from individuals or employers trying to “game the system,” Director Charles J. Fogarty said in a department email newsletter. More

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DLT recovers $4.6M in UI benefits scams so far this year

COURTESY R.I. DEPARTMENT OF LABOR AND TRAINING
A CONCERTED EFFORT TO COMBAT FRAUD in unemployment and temporary disability insurance programs has resulted in more than $22 million in recouped money for the state in the last five years.
Posted 8/27/14

PROVIDENCE – The R.I. Department of Labor and Training has recovered more than $4.6 million so far this calendar year from individuals or employers trying to “game the system,” Director Charles J. Fogarty said in a department email newsletter.

Most of the 55,000 Rhode Islanders who receive unemployment benefits are legally entitled to the benefits they receive, but “a small minority” of claimants and employers try to manipulate the program to unfair advantage, Fogarty said. In 2011, the agency launched a focused effort to curtail fraud. Besides education, the department is also engaged in prevention, detection and prosecution, he said.

While the $4.6 million recovered in 2014 is less than the $5.6 million recovered last year, according to a chart in the newsletter, 2014 has four months remaining in which DLT can continue its efforts. Since 2011, a total of $22.2 million has been recouped, the chart shows.

“The department vigorously seeks repayment from claimants who have collected improperly,” Fogarty wrote. “In addition to repayment plans, state law allows DLT to collect these funds by deducting them from future unemployment benefits, lottery winnings, state income tax refunds and as of 2014, by federal income tax refunds.”

Several other strategies are in play, he noted.

DLT added a fifth staff member to the unemployment fraud unit, even though overall staffing in the department has declined by 18 percent in the last three years, he said.

The state agency also cross-references all unemployment insurance claimants in several databases to ensure eligibility. These databases include state tax and wage records, National Directory of New Hires, vital statistics and ACI prisoner cross match, Fogarty said.

In 2013, two initiatives put in place have helped with prevention and prosecution.

A technology grant DLT won enables staff to flag applications coming from suspicious Internet addresses. And, through a pilot program with the Attorney General’s office, DLT helps pay for a full-time attorney to prosecute the worst cases of fraud. A dozen cases have been prosecuted involving $234,000 in repayments to the Unemployment Insurance Trust Fund, Fogarty said.

“The program has been a clear success and has been continued indefinitely,” he said.

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