State law enforcement officials announced on Tuesday that a crackdown on unemployment fraud has led to the arrests of 126 New York City residents who received $930,000 from the state’s unemployment insurance trust fund in the last year.
The arrests are the result of a stepped-up enforcement effort, using data-matching and more coordination among agencies, to identify New Yorkers who collect jobless benefits even though they are still working.
The state’s unemployment insurance program pays more than $2 billion a year in jobless benefits, which go to workers who lose their jobs through no fault of their own. Those who qualify for unemployment can currently receive as much as $405 in weekly benefits for up to 39 weeks.
“Unemployment insurance is a lifeline that keeps thousands of families afloat across New York State during difficult times,” said M. Patricia Smith, the state labor commissioner. “As New Yorkers continue to reel from the effects of a nationwide downturn in the economy, it is nothing short of shameful to think that people would steal from a fund designed to help families put food on the table, gas in their cars and clothes on the backs of their children.”
The investigations were conducted by the State Labor Department in conjunction with the State Police Bureau of Criminal Investigation, the district attorneys of the five boroughs of New York City and other law enforcement agencies.
Labor Department officials said that unemployment fraud hurts the state’s businesses by forcing them to pay higher taxes. A company’s unemployment tax rate is based in part on how many of its former employees receive jobless benefits. A New York business with 15 employees would have to pay about $1,000 a year in additional unemployment taxes for each new claim, fraudulent or not. If a fraudulent claim is detected, the tax for that claim would not be charged, department officials said.
State officials say that their investigators uncover more than 600 cases of unemployment insurance fraud per year, including some in which recipients submit multiple claims using different Social Security numbers. They said that since January, $17.5 million had been returned to the unemployment insurance trust fund as a result of Labor Department investigations.
By STEVEN GREENHOUSE
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