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New York State Cracks Down on Unemployment Insurance Fraud
Department of Labor Announces 2009 Fraud Investigation Results in Central New York, Mohawk Valley and Southern Tier

Albany, NY (January 11, 2010) - Can't See the video? Click Here to Get Adobe Flash Player. Joined by law enforcement officials from throughout Central New York, the Mohawk Valley and the Southern Tier, State Labor Commissioner M. Patricia Smith today announced  53 arrests in the three regions during 2009 for theft of nearly $250,000 from New York State's Unemployment Insurance (UI) trust fund.  The State Labor Department worked with nearly every district attorney in the regions, as well as dozens of other law enforcement agencies, to bring these people to justice.  Most of those arrested had collected UI benefits while earning a paycheck.

Governor David A. Paterson said, "One of the pitfalls of having so many New Yorkers collecting UI is that there will always be somebody who will try to take advantage of the system.  Fortunately, we're doing a great job to keep on top of fraud and the results speak for themselves.  In fact, New York's stepped-up crackdown on Unemployment Insurance fraud saved businesses large and small more than $35 million last year alone." 

"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," said Commissioner Smith.  "Governor Paterson has directed the Labor Department and its partners in law enforcement to remain aggressive in bringing individuals who defraud the UI system to justice.  Rest assured we will do just that."

Joining the Commissioner at a press conference in Syracuse were: Onondaga County District Attorney William J. Fitzpatrick; Oneida County District Attorney Scott McNamara; Broome County District Attorney Gerald Mollen; Cayuga County District Attorney Jon E. Budelmann; Madison County District Attorney William Gabor; Tompkins County Assistant District Attorney Daniel W. Johnson; and Steuben County District Attorney John C. Tunney.

These arrests are a direct result of a 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 by region and county are below:

Central NY:

Onondaga        19 arrests         $105,681

Oswego           5 arrests           $28,237

Madison           2 arrests           $10,489

Cayuga             1 arrest             $5,050

Total Central NY Region:  27 arrests - $149,457

Mohawk Valley:

Oneida             4 arrests           $8,231

Otsego             2 arrests           $11,219

Montgomery     1 arrest             $3,953

Total Mohawk Valley Region:  7 arrests - $23,403

Southern Tier

Broome          7 arrests             $27,291

Steuben          4 arrests            $17,334

Tompkins       1 arrest               $3,442

Chemung        4 arrests             $9,144

Chenango       3 arrests             $16,980

Total Southern Tier:  19 arrests - $74,191

Total: 53 arrests - $247,051

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, it has a negative effect on businesses across the state.  Employers whose accounts pay for the false claims must take on a higher tax rate.  For example, the average employer in New York State (with some 14 employees) that has an undetected fraudulent claim filed against it will pay over $700 more in taxes the next year.  However, if we detect the fraud the tax increase is not charged to the employer.

"Unemployment insurance is a safety net for those who need assistance, not a jackpot for those who would game the system and cheat their neighbors," said Deputy Secretary for Public Safety Denise E. O'Donnell.  "In this economic climate, when government resources are scarce and needs high, we must be especially vigilant to discourage and punish cheating.  Governor Paterson and I applaud Commissioner Smith and local law enforcement officials for their aggressive efforts to track down cheaters and recover the money they stole from honest taxpayers."

New York State Police Superintendent Harry J. Corbitt said, "The State Police stands ready to assist in investigating and apprehending those individuals willing to engage in the fraudulent use of Unemployment Insurance funds meant to assist honest workers and their families."

To make an anonymous report about fraud against the Unemployment Insurance fund, call the Department of Labor's toll-free hotline at (888) 598-2077.