New York seeking to suppress unemployment insurance fraud

Amid a New York State Department of Labor investigation determining insurance fraud accounted for more than $11 million in benefits payments in August, state officials are outlining suppression efforts.

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“At the height of the pandemic, when our state experienced an unprecedented unemployment crisis, these fraudulent unemployment insurance claims took resources away from New Yorkers who needed them most,” Gov. Kathy Hochul said. “My administration is taking action to step up our investigations of unemployment insurance fraud, hold those who take advantage of the system accountable, and protect this crucial benefit for New Yorkers in need.”

Hochul said the state would seek repayment for fraudulent benefits payments and refer nonpayment to state law enforcement. It is anticipated the Department of Labor Office of Special Investigations will uncover $110 million in fraudulently acquired benefits this year.

The Department of Labor deployed an upgraded fraud detection system enabling investigators to increase case review efficiency while streamlining records requests to employers to confirm employment dates.

If the system detects a fraudulent payment, the claimant is presented with an opportunity to explain the discrepancy. Post review, if the claimant is found to have worked while collecting benefits, the Department of Labor will take steps to ensure the payments are returned.

Per authorities, the steps to address returned payments include establishing repayment plans, garnishing state and federal tax returns, and referring matters of nonpayment to state and/or federal law enforcement.