When you lose your job because of circumstances out of your control, you are eligible for unemployment insurance program (UIP) benefits for twelve months. The benefits offer the financial support you need before securing a new job. Unfortunately, some applicants try to defraud the program to obtain financial gains they are ineligible for or to deny qualified applicants their perks. Unemployment insurance fraud refers to giving misleading, false, or lacking information to defraud the UIP.
At the California Criminal Lawyer Group in Bakersfield, we understand that unemployment cases are increasing because of the challenging economic times, pushing people to participate in fraud crimes. Therefore, we have explained UI fraud below to help you understand the crime if you face the charges.
Unemployment insurance History
The California state and federal governments established unemployment insurance (UI) in 1935. The state’s Employment Development Department (EDD) operates the insurance program. The objective of forming the program was to help workers dismissed from their jobs because of circumstances out of their control obtain financial support for twelve months before securing employment. You must understand that you are ineligible for unemployment gains when you quit your previous job or are fired due to poor performance, unless under unique circumstances.
Some beneficiaries receive as little as $40, while others obtain at most $450 weekly from the UIP, depending on their unique circumstances. However, before you can receive these unemployment gains, you must satisfy the following requirements:
- You must not be a job holder, or if you had a job, your hours have been reduced to below full-time hours
- You are keenly searching for a job
- You are physically capable, ready, and willing to work
- You should have been employed for the last eighteen months
Many applicants opt to obtain undue gains from the UIP unlawfully. You will face insurance fraud charges if you do not meet the required criteria and try to receive these benefits illegally. However, sometimes an honest mistake during application can attract investigations and count as UI fraud. You should immediately talk to a criminal defense lawyer for legal representation and guidance.
You are eligible for unemployment insurance financial gains if you have lost a job for reasons for which you are not responsible. Nevertheless, you can receive these benefits in exceptional circumstances, even when you quit or are laid off. Whether you are eligible depends on the EDD after they evaluate your applications. Besides, when you have questions regarding your eligibility after being fired or quitting your job, you should talk to the EDD to explain the exceptional circumstances under which you could qualify for the perks.
UIP offers unemployed individuals the financial support they need during the most challenging time of their lives. Unfortunately, some applicants exploit the insurance program to obtain financial gains they are unqualified to receive. Employers will contribute more to the coverage when people continue to take undue advantage of the program. Again, the system will have a buildup of claims, and those legally eligible for the gains will not receive their money on time.
Furthermore, it is unlawful for people working in the UIP responsible for releasing the funds to wrongfully hold or disburse the funds outside the provisions of the law. Additionally, it is illegal for employers to give false information about a former employee, such as work hours and income, to remove or reduce their benefits unlawfully. Engaging in insurance fraud is criminalized and punishable under the penal code.
Unemployment Insurance (UI) Fraud Under California Statutes
Per the California Unemployment Insurance Code, UIC 2101, an insurance scam happens when you:
- Knowingly or deliberately supplying false details to the California EDD
- Intentionally conceal material facts
- Supply false documentation to the agency to acquire or increase UI gains or rebuff an eligible party's rightful benefits.
Also, you can face charges under PEN 550, which focuses on general insurance fraud.
Investigating UI Fraud
Several rules have been created to protect UIP from criminal activities and punish those responsible. Therefore, when you are suspected of engaging in this kind of fraud, the EDD will commence its investigations.
Usually, when someone discovers you are engaging in an insurance scam, they send a tip to the EDD. Most tips the EDD receives come from the general public. The agency has a hotline number (800) 229-6279 or a website for receiving information from the general public. Other leads originate from the agency’s field agents. These officers are responsible for finding eligible UI applicants and collecting their application forms. If any of these applications seem suspicious, the agents will start an investigation.
Once the agency identifies you as a suspect, their fraud investigation crew takes over the case to find proof of fraud in your submission or benefits you have received that you are not entitled to. If the evidence they possess is sufficient to convince the prosecutor to prefer criminal charges, the investigative unit will present their findings to EDD. The agency will then submit the case file to the prosecutor to file formal charges.
If the evidence submitted is not compelling, the EDD will hold on to the file until additional proof is obtained against you. Nevertheless, when the agency has overwhelming evidence of UI fraud against you, they will detain you immediately, and the prosecutor will formally charge you with insurance fraud.
Forms of Unemployment Insurance (UI) Fraud
Unemployment scams are a severe offense in California. You can infringe on the provisions that guide UIP in several ways. The instances where you could face these charges are:
Claimant Violations
The employee or party applying for the benefits is the claimant. As a claimant or employee, you can violate the provisions of UIP in various ways.
You engage in fraud if you receive UI financial gains while employed. The perks you are receiving are intended for the unemployed. The law clearly states that you must inform EDD when you obtain employment so that they can stop your benefits and other unemployed individuals are considered. When you acquire a job and fail to notify the EDD, you will continue receiving the UI perks, disadvantageous employed persons, and employers who contribute to the coverage by paying taxes.
Similarly, as a claimant, obtaining various perks without disclosing them to the entity is illegal. As an unemployed individual in Bakersfield, you are eligible for multiple financial gains, like workers’ compensation and retirement benefits. The law clearly states that you should advise EDD on all the additional benefits you are obtaining. Not disclosing these gains violates the UI section.
Also, collecting unemployment benefits using a false Social Security Number (SSN), identity, or job details is unlawful. Committing this form of UI fraud attracts additional identity theft counts.
Other ways a claimant engages in UI fraud include:
- Living in California while attempting to obtain perks from a different jurisdiction fraudulently
- Cashing or taking someone’s unemployment benefits check without their authorization
- Establishing a fictitious worker and pretending to be an employee eligible for UI perks
- Falsifying a work-search history to prove you are actively looking for employment when your focus is only on receiving the unemployment perks
- You were fabricating or falsifying explanations for losing your job. For instance, stating that you were discharged from your previous job because of reasons out of your control when you were terminated due to poor performance.
Employer Violations
Workers and applicants are not the only people who violate UI statutes or take undue advantage of the program. Employers also engage in this kind of insurance scam when they intentionally supply false details to dismiss an employee or withhold their benefits to avoid paying taxes to the UIP.
An employer also commits UI scams by deliberately withholding employee deductions and refusing to submit them to the responsible organization.
If you, as a worker or employer, are under investigation by the EDD and there is solid evidence linking you to UI fraud, your case will be presented to the local prosecutor. After, you will be arrested and face formal charges, whose guilty verdict will attract severe consequences. Therefore, if you are being investigated or have been charged with UI fraud in Bakersfield, please do not forget to contact the California Criminal Lawyer Group for guidance.
Proving UI Fraud
Just because you face unemployment fraud charges does not make you guilty. The DA must rely on the EDD’s report to demonstrate guilt. Firstly, the agency must prove in their report that you forged your work-search struggles. If you give false information about your efforts to search for work, the agency can contact the employers you purport to have sought employment with. If none of them saw you, you fabricated the details you submitted during your application, making you guilty of UI fraud.
Besides, if the report demonstrates that you used someone else’s identity to obtain benefits, you will be guilty of fraud. When proving this element, the EDD tracks down the individual whose documentation you falsified. Other resources the prosecutor can rely on to demonstrate false identity include wage records from the tax division, video footage, and anonymous tips from the public.
UI Fraud Penalties
The penalties you will face when the prosecutor proves all the elements of the crime beyond a reasonable doubt depend on your unique circumstances. California fraud offenses are wobblers, meaning the prosecutor can file the crime as a felony or misdemeanor, depending on your criminal history and your case’s nature.
California has two laws about unemployment insurance fraud, each attracting different penalties. Therefore, you should know that your penalties will vary depending on the type of conviction and the statute you are charged under.
1. California UIC 2101
Under UIC 2101, it is unlawful to purposely hide material information, supply false details, or fabricate a made-up identity like a fake SSN to obtain unemployment gains. As a misdemeanor, a conviction for a UIC 2101 violation attracts twelve months of jail incarceration and monetary court fines of at most $20,000. Alternatively, the court can sentence you to misdemeanor probation instead of a jail term.
And when the prosecutor prefers felony charges, and they secure a guilty verdict, you will face prison incarceration for sixteen, twenty-four, or thirty-six months in jail and court financial fines of, at most, $20,000. Besides, the court can sentence you to felony or formal probation instead of prison incarceration.
2. PEN 550 Penalties
California PC 550 is the statute that defines general insurance fraud. When the prosecutor opts to file your UI fraud under this statute, the penalties you will face when convicted depend on the severity of the scam offense. If the worth of the fraudulent claim is at most $950 in twelve months, the prosecutor will file the offense as a misdemeanor. However, when the sum of the fraudulent UI claim exceeds $950, the prosecutor makes the crime a felony. If you have been receiving undue unemployment benefits for twelve months, the EDD adds the sum you have received throughout the duration to determine if it exceeds $950.
When the value of the fraud within a year is below $950, the prosecutor will charge you with a misdemeanor. The penalties you will attract upon sentencing include at most six months of jail and court-imposed fines of $1,000.
The offense is a wobbler if the fraud amount for one year exceeds $950. Therefore, if the value of the fraudulent claim exceeds $950 and the prosecutor prefers misdemeanor charges, a conviction will attract a possible jail term of at most twelve months and court fines not exceeding $10,000.
When the fraud figure is at most $950 or $950 accumulated over twelve months, you risk felony charges. A guilty verdict for the crime attracts twenty-four, thirty-six, or sixty months of prison incarceration and a monetary court fine of, at most, $50,000 or double the fraud figure, whichever is greater.
3. Additional Penalties
Engaging in unemployment insurance fraud is an act of moral depravity. If the court convicts you of the offense, the guilty verdict will negatively affect your professional license. Also, when you are applying for any benefits or already receiving some, a conviction will bar you from any paid gains. Additionally, the EDD will require you to repay all the unemployment benefits you have received and an additional 30% penalty on the total fraud figure.
Retaining the services of the California Criminal Lawyer Group when you face UI fraud charges in Bakersfield is advisable. The lawyers will negotiate to reimburse the benefits obtained fraudulently for a charge dismissal. Whether your petition to have the charges dismissed in exchange for restitution will be acknowledged hinges on your case’s nature.
If the entity accepts your proposition to drop the counts, you will repay them the fraud amount promptly. Not honoring the restitution terms could lead to the agency initiating criminal charges, notwithstanding the amount you had paid as restitution.
Professional license holders or individuals whose job relies on their reputation should pay the reimbursement fast because even if criminal counts alone are filed, they could have devastating consequences. So, you should hire a lawyer early in the case to negotiate with the prosecutor for reimbursement to avoid formal charges or a possible conviction.
UI Fraud Valid Defenses
At the California Criminal Lawyer Group, we have dealt with almost all kinds of UI fraud during our years in Bakersfield. Our lawyers will evaluate your case, craft defense strategies, and tailor them to meet the unique requirements of your charges for a fair outcome. The valid defense strategies we will mount in your case are:
You Lacked the Intent or Motive to Defraud
California fraud statutes place the burden of proof in the hands of the prosecutor, who must demonstrate beyond a moral certainty that you planned or intended to engage in fraud by submitting false or incomplete applications. There should be strong motives showing you wanted to obtain illegal unemployment benefits.
Even if the prosecutor can show you had motives to defraud, your defense lawyer can claim that you lacked knowledge or misinterpreted UIC 2101, leading to the fraud accusations.
Alternatively, you can assert that you reasonably assumed you were presenting a genuine claim or accidentally provided incomplete or false information. Your attorney should cast doubt in the jury's minds about your intentions at the time of the alleged fraud. The counts will be dropped if the proof presented does not convince the court beyond moral certainty that you had motives for committing insurance fraud.
Inadequate Evidence
With the recent increase in UI fraud cases, the relevant authorities are working tirelessly to bring those responsible to justice. In the process, they are speeding up investigations and prosecutions. When the investigative unit of EDD rushes investigations, they miss out on crucial evidence or make the wrong conclusion.
If the evidentiary standard for fraud offenses is not satisfied by the evidence presented, a conviction will not happen. The court will acquit you of the allegations if your lawyer argues that the proof is insufficient to secure a guilty verdict.
Plea Bargain
Sometimes, the proof against you can be overwhelming to the extent that your guilt is unquestionable. If the prosecutor has compelling evidence and you lack viable defenses, your defense lawyer should consider a plea deal. Plea deals are feasible when it is impossible to escape criminal culpability. Also, if the prosecutor has weak evidence, you have several mitigating circumstances, or there is a backlog of cases, the prosecutor can be willing to negotiate a plea deal. Here, the prosecutor agrees to lower your counts or sentence or withdraw the charges if you plead guilty to a lesser offense.
UI Fraud Associated Crimes
Unemployment insurance fraud comprises crimes like theft, perjury, and forgery, making it easy for the court to charge you with additional crimes beyond the baseline offense. Offenses that can be committed with or in place of UI fraud include:
1. California Forgery
PEN 470 defines forgery as the illegal alteration, use, or creation of a written manuscript with the motive of committing fraud. Therefore, you can face forgery instead or UI fraud if you falsify another person’s handwriting, sign another party’s name as a claimant, or sign for your boss or supervisor, who is supposed to corroborate your claim during the application for unemployment insurance gains.
A PEN 470 violation is chargeable as a wobbler. A misdemeanor conviction attracts misdemeanor probation, at most twelve months of jail incarceration, and a court fine not exceeding $1,000.
A felony, on the other hand, attracts formal probation, at most 36 months of prison incarceration, and a maximum of $10,000 in court fines.
2. California Perjury
Per PEN 118, it is a felony to supply false details in a signed affidavit or when pursuing an injury claim. The offense is charged alongside or instead of UI fraud when you give the wrong information to UIP to obtain unemployment benefits for which you are not eligible. The crime attracts, at most, 48 months of jail incarceration and a court fine of $10,000 at most.
3. California Conspiracy
PEN 182 criminalizes conspiring to participate in criminal activity. Therefore, when you conspire with someone to participate in illegal conduct to fraudulently acquire unemployment gains or deny a legitimate claimant their rightful perks, you will risk both conspiracy and UI fraud charges. Conspiracy penalties are the same as those for UI fraud charges.
4. Grand Theft
It is illegal under PEN 487 to illegally take property belonging to another party, and the value of the property in question is above $950. For this statute, property refers to cash, real property like land, or personal items. When you fraudulently acquire undue unemployment financial gains above $950 from the EDD, you risk additional charges of grand theft on top of the baseline crime. A PEN 487 violation is a wobbler with a felony, attracting at most thirty-six months in prison and a court financial fine not exceeding $10,000.
Find a Competent Fraud Crimes Defense Lawyer Near Me
At the California Criminal Lawyer Group in Bakersfield, we can offer legal guidance if you are being investigated or have a pending UI fraud charge. Call us today at 661-750-8230 to speak to discuss your case and craft viable defenses that will protect your freedom and reputation.
