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 Albany, NY - Joined by state and county officials at an event in White Plains, State Labor Commissioner M. Patricia Smith announced that 49 individuals in the Hudson Valley region were arrested and charged with multiple felonies for attempting to defraud New York State’s Unemployment Insurance (UI) program.
The State Labor Department worked with every district attorney in the Hudson Valley, as well as dozens of other law enforcement agencies, to bring these individuals to justice. Most of the individuals that were arrested collected UI benefits while they were earning a paycheck.
“Unemployment Insurance is a lifeline that keeps thousands of families afloat across New York State during difficult times,” said Commissioner Smith. “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 Labor Department and its partners in law enforcement will remain aggressive in bringing individuals who defraud the UI system to justice.”
Joining the Commissioner in White Plains were Westchester County District Attorney Janet DiFiore, Rockland County District Attorney Thomas Zugibe, Westchester County Executive Andrew Spano and representatives from the State Police. In Westchester, Dutchess, Orange, Ulster, Rockland and Putnam Counties, 49 individuals were arrested and charged with multiple felonies for thefts of nearly $194,000 from New York State’s UI program. These arrests are a direct result of a new Labor Department program that emphasizes improved detection of fraud through data matching, more proactive investigations and better coordination with local law enforcement and prosecution agencies. Details are below:
* Westchester 25 cases $95,994
* Dutchess 11 cases $41,699
* Orange 9 cases $39,382
* Ulster 2 case $4,985
* Rockland 1 case $6,075
* Putnam 1 case $5,698
* Total 49 cases $193,833
Westchester County District Attorney Janet DiFiore said, “Collaboration between law enforcement agencies, as evidenced here, is key to investigating, prosecuting and ultimately holding accountable those who choose to abuse an important safety net. The misapprehension that this kind of larceny is ‘victimless’ couldn’t be more wrong. Fraudulent claims steal not just from the State, but directly from those individuals and families who need assistance during particularly difficult times in their lives.”
Rockland County District Attorney Thomas Zugibe said, “I applaud the efforts of the Labor Department, under the guidance of Commissioner M. Patricia Smith, to expose this greed and bring the offenders to justice. This office will commit all necessary resources to assist the Labor Department in their continuing efforts to identify the offenders and assure that they are aggressively prosecuted. Maintaining the integrity of this program will serve to assure that funds will be available to those who are legitimately entitled to unemployment insurance benefits."
New York State Police Superintendent Harry J. Corbitt said, “These arrests are the result of a collaborative and thorough investigation by members of our Bureau of Criminal Investigation and the Department of Labor. Together, we are bringing to justice individuals who defrauded the State’s Unemployment Insurance program, ultimately, an expense that will affect business owners and the general public though increased taxes.”
Westchester County Executive Andrew Spano said, “Stealing unemployment insurance benefits is not only a crime, but it cheats hard-working people out of the support they need at a time when finding employment is more difficult. These arrests represent a victory for the taxpayer as well as those who are legitimately entitled to unemployment insurance.’’
The State Labor Department administers unemployment insurance benefits for the federal government. The weekly payments assist eligible workers who have lost their jobs through no fault of their own. To qualify for UI, people must be unemployed; ready, willing and able to work; and searching for a new job.
When applicants cheat the system by stealing from the UI Trust Fund, there is a negative impact on businesses across the state through higher rates for employers whose accounts pay for the false claims. For example, the average employer in New York State (with approximately 15 employees) that has an undetected fraudulent claim filed against it will see a tax increase of approximately $1,000 in the following calendar year. However, the tax increase is not charged to the employer if the fraudulent claim is detected.
Commissioner Smith specifically thanked the New York State Police and Westchester County District Attorney Janet DiFiore; Orange County District Attorney Francis D. Phillips, II; Dutchess County District Attorney William V. Grady; Ulster County District Attorney Holly Carnright; Rockland County District Attorney Thomas Zugibe; and Putnam County District Attorney Adam Levy; their respective offices; and Labor Department staff for their work investigating and prosecuting these cases.
The Unemployment Insurance program pays over $2 billion in UI benefits each year. As a result of the department’s fraud investigations, over 600 UI cases per year result in arrests and prosecution for fraud. This new level of cooperation among the State Labor Department, law enforcement and state prosecutors will improve the ability to both identify and prosecute UI fraud, and to return fraudulent payments to the UI Trust Fund. Since January 2008, $14,353,411 has been collected and returned to the UI Trust Fund as a direct result of Labor Department investigations.
At this point, the charges against the defendants are merely accusations, and the defendants are presumed innocent until and unless proven guilty.
Anyone with information that individuals or businesses have committed fraud against the Unemployment Insurance fund can call the Department of Labor’s toll-free fraud hotline to make an anonymous report at (888) 598-2077.
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