If you're accused of committing unemployment insurance fraud, you need to speak to a skilled criminal defense attorney who specializes in fraud law immediately. When the case goes to trial, having an attorney's advice and representation is crucial for mounting a strong defense. This increases your chances of avoiding being convicted and a term in jail or prison, especially if your defense lawyer's arguments undermine the prosecution's evidence. Our team at Chula Vista Criminal Attorney offers legal defense services for fraud charges in the Chula Vista area, California. Get in touch so we can start building a robust defense strategy.
An Overview of Unemployment Insurance Fraud Under California Law
Unemployment Insurance Code (UIC) 2101 and California's PEN 550 deal with fraud crimes regarding unemployment insurance. The unemployment insurance program (UIP) is specifically designed to assist people who have lost their employment due to circumstances beyond their control. It's designed to offer you some financial breathing room as you look for work elsewhere.
However, it doesn't apply to all individuals, like if you voluntarily quit your job or were dismissed under certain circumstances. If approved, applicants could receive up to $450 per week for up to one year from the program. The unemployment insurance program is managed by the California Employment Development Department (EDD).
Fraud involving unemployment benefits often takes place when:
- The accused person collects unemployment benefits for which they are not eligible.
- In situations where the accused could assist another person in receiving benefits in violation of the law.
Giving false information, concealing important information, or using a false identity to apply for unemployment benefits are all examples of this crime.
Unemployment Benefits Requirements
Unemployment insurance benefits are offered to provide temporary assistance to people who have lost their employment. The maximum they could make weekly would amount to $450, but that sum could also depend on several other circumstances.
The EDD makes a case-by-case determination of eligibility, although there are requirements that should be satisfied to receive benefits, such as:
- You've been working for the past 18 months.
- You're currently unemployed.
- You are currently prepared and ready to work.
- You are currently seeking a new job.
Many people choose to illegally benefit from UI benefits. If this occurs, they can be found guilty of insurance fraud. If you are under investigation for unemployment insurance fraud, consult with a criminal defense lawyer as soon as possible.
Unemployment Insurance Fraud
Unemployment benefit insurance fraud has been an ongoing challenge for a long time. However, it has been on the rise as more individuals hunt for illegal ways to take advantage of state and federal programs. This type of fraud can be carried out in several ways, the most common of which is the use of forged documents to get access to or increase insurance program benefits.
California State Unemployment Insurance rules are currently put in place to assist control this type of criminal activity. Any person found guilty of defrauding the scheme's system will face conviction and harsh penalties, which could involve several years behind bars.
If a defendant is suspected of perpetrating California unemployment insurance fraud, the EDD will serve as the agency in charge of investigating the claims.
When fraud is discovered, the agency receives several tips that originate from:
- The general public— Information can come from members of the public through the department's hotline services or the website's report fraud section.
- EDD field agents—The department usually dispatches officers to search for eligible individuals and collect their unemployment insurance compensation applications. If several claims seem suspicious (for example, a forged department seal or signature), officers can voice their suspicions and initiate an investigation right away.
The agency’s investigation team will respond swiftly to investigate the claims if it discovers evidence of fraud in any submission or one that has already received funding from the insurance program. The team will inform the agency of its findings if it finds more evidence to support the claims After that, the local prosecutor will be required to file fraud charges against the individual.
If the EDD believes that the accusations will be denied, they could choose to retain the file in case additional evidence is found against the alleged perpetrator. However, if the investigative team finds enough proof, the defendant will be detained right away and charged with the crime.
Examples of California Unemployment Insurance Fraud Incidents
California considers UI fraud a serious crime. The state's provisions governing Unemployment Insurance programs can be infringed on in a number of different ways. The following are some instances of how the most common of these crimes are carried out:
Violations by Claimant
California UI regulations can be infringed in a variety of ways by claimants or employees, such as:
- You're receiving various types of perks without disclosing them to the EDD — California's unemployed have access to a variety of benefits. These include pension benefits and workers' compensation. The law mandates that you inform the state EDD of any additional benefits you are getting. Failure to do so constitutes a breach of UI statutes.
- Receiving unemployment compensation while you're still employed — It's not allowed because these perks are meant solely to be accessed by those who are unemployed. The law mandates that you notify the EDD right away if you begin to work so that other beneficiaries can be considered. Working while receiving insurance benefits puts other employed individuals and employers that pay taxes to pay for these programs at a disadvantage.
- You are collecting unemployment benefits while working and using a false identity, SSN, or job information—If you're found guilty of providing false information to deceive an insurance company, you may also face accusations of identity theft.
- Creating a fictitious employer and posing as one of his or her staff members to qualify for unemployment insurance benefits.
- Trying to get unemployment insurance benefits from another jurisdiction while still residing in California.
- Taking another person's unemployment benefit without their permission.
- Fabricating explanations for why you've been fired. For instance, you claim that you were laid off from your previous position while, in reality, you were dismissed for bad performance.
- Falsely claiming you're looking for work or are actively seeking employment when in reality you are not even concerned to do so to keep receiving unemployment benefits.
Violations by Employers
Not only employees or claimants who want to take advantage of the unemployment insurance program commit UI fraud. Employers can also commit this type of crime in the following ways:
- When a company deliberately gives false information as the justification for terminating an employee's job or withholding compensation to avoid contributing to the insurance scheme.
- When an employer purposely withholds an employee's deductions to avoid making the legally required payments to the EDD.
Investigation of Unemployment Insurance Fraud
The California EDD is usually responsible for conducting investigations into allegations of UI fraud. The majority of the leads come from members of the public and the regional field officers, who process the initial applications. There are various ways that fraud can be allegedly committed.
You can be charged with using false employer identification. In this situation, the EDD would get in touch with the employer to verify the details you gave. It could be argued that you falsified your claim that you had been actively searching for work.
EDD would call the potential employers you noted on the form once again to verify that you had applied. If there is an allegation that you stole someone else's identity, the field investigator can find out the truth relatively quickly. Video footage of surveillance can also be used during the investigation of some situations of unemployment insurance fraud.
The fraud investigation team will look into the allegations and supporting documentation if there are reasonable grounds for suspicion of insurance fraud. If sufficient proof of insurance fraud is uncovered throughout the investigation, the investigators will forward their findings to the prosecution to convince them to file charges.
Penalties For UI Fraud
The punishments for unemployment fraud could vary depending on the specific offense. The vast majority of California fraud cases are classified as "wobbler" crimes. This means that prosecutors can decide to charge the case as either a misdemeanor or a felony.
The specifics of the case, the value in question, and the defendant's criminal history will all influence the prosecutor's decision regarding how to proceed with the case. Multiple sections of California law can be used to prosecute unemployment insurance fraud.
California's UIC 2101
It is illegal, under California UIC 2101, to knowingly conceal material information, give false information, or assume a fraudulent identity—such as a fake Social Security number (SSN)—to collect benefits. If you are convicted of a misdemeanor offense under UIC 2101 and the case is classified as a wobbler, you could be subject to the following punishments:
- Serving a maximum of one year in jail.
- A maximum fine of $20,000.
- Summary/Informal probation.
The following penalties would apply if a UIC 2101 violation was determined to have been a felony:
- Serving a prison sentence of 16 months, 2 years, or 3 years.
- Cash fines not exceeding $20,000.
- Formal probation.
California's PEN 550
The General insurance fraud statute is outlined in California's PEN 550. When a prosecutor decides to file allegations under this act, the legal penalties will be decided by the specific level of fraud perpetrated. UI fraud involving no more than $950 is deemed a misdemeanor violation, with a maximum punishment of $1,000 in cash fines and six months in jail.
PC 550 specifies that fraud involving amounts that exceed $950 is considered a felony crime that carries the following penalties:
- $50,000 in cash fines, or double the amount of the fraud.
- Serving 2 years, 3 years, or 5 years in prison.
- Formal probation.
It's important to note that since UI fraud is considered a moral depravity act, a conviction could jeopardize whatever professional license you already hold.
Additionally, if you are found guilty of receiving unemployment benefits fraudulently, you'll be required to pay back the money to the EDD and pay a 30% penalty on the entire sum you received. In certain situations, your defense lawyer could be able to work out an agreement with the Employment Development Department in which you settle reimbursement in exchange for the dismissal of the criminal investigations.
If you are a policyholder who received excessive benefits, you are required by law to pay back anything you received that was more than what was necessary. You should repay the money you received, irrespective of whether it was inadvertent or whether the previous employer successfully challenged the allegations against you. If your former employer believed you were ineligible for the benefits, they could file an appeal and contest your unemployment benefits.
You would have to reimburse all the unemployment compensation and benefits if the employer was successful in opposing your claim. If you fail to repay the excessive payments, they'll remain on your file until you do. Also, if you don't repay them, you can lose your future eligibility for unemployment insurance benefits.
Normally, you will get a letter from the unemployment office informing you that your compensation was excessive. The information in this notice would include the amount you need to pay back, any fines, the reasons for the overcharge, instructions on how to pay restitution, and information on how to file an appeal.
You can also apply if you believe that the notice issued is incorrect. With this approach, you might be able to avoid the repayments by getting a waiver. However, you only have the right to request a waiver if the overpayment was an error. If you received an overpayment by giving the Department of Labor misleading or inaccurate data, you will not be eligible to file an exemption petition and will be compelled to repay the money you received.
Legal Defenses for Unemployment Insurance Fraud Charges
A professional attorney can use their knowledge to protect you from charges that you're accused of defrauding California's unemployment insurance system. Each case is unique, and the defense's approach will differ based on the specifics of your scenario.
The most common legal defenses used include the following:
The Defendant Had No Intention to Engage in Fraud
It's important to keep in mind that prosecutors have to prove beyond any reasonable doubt that the accused willfully provided false information or credentials to obtain benefits illegally. In other words, there should be a clear motive to perpetrate fraud.
A criminal defense attorney would argue that the accused person had a reason for believing that his or her unemployment insurance petition was legitimate or that he or she presented EDD with inaccurate details unintentionally, in which case the defendant committed an honest mistake. If the defense attorney is successful in casting a reasonable doubt on the defendant's intention, he or she stands a good chance of avoiding a conviction for violating unemployment insurance fraud laws.
Plea Deal Negotiations
There are cases of unemployment fraud where your guilt is unquestionable. This means the evidence provided is compelling and convincing, and there are no viable legal defenses. In these types of situations, your defense lawyer can try to negotiate a favorable plea agreement with the prosecutor. A plea agreement is an effective way to minimize culpability if the evidence against you is solid enough. If you enter a plea of guilty or no contest, the prosecutor can choose to withdraw the charges and reduce the sentence.
Many prosecuting attorneys pursue fraud allegations in an impulsive, quick manner. They need to have enough evidence to prove the defendant's guilt beyond any reasonable doubt. Your lawyer could argue that the evidence simply isn't enough to prove your guilt in some cases of unemployment fraud.
Crimes Associated With UI Fraud Claims
Since UI fraud comprises theft, perjury, and forgery, courts can bring more charges in addition to the underlying crime. The following crimes can be charged alongside unemployment insurance fraud:
According to California law, forgery occurs when a person changes or alters a signature intending to commit fraud. Normally, forgery involves:
- Faking someone else's handwriting.
- Signing in place of another individual's name.
- Falsifying legal papers, including money orders, bonds, and checks.
The offense is classified as a wobbler. Therefore, the prosecutor has the option of filing the charge as a felony or a misdemeanor. A felony conviction is likely to attract 36 months behind bars as well as formal probation. If charged with a misdemeanor, you could be sentenced to no more than 12 months in jail and summary probation.
You still have a chance to fight back against the charge. Having an experienced criminal defense lawyer on your side can help boost your odds of winning the case. The defense lawyer could use tactics like false allegations, coerced confessions, and a lack of intent to commit fraud.
California PEN 118 defines the crime of perjury. Perjury occurs when an individual gives false testimony while under oath. Any of the following actions constitute perjury:
- Give false information in an affidavit that has been signed.
- Provide false information when pursuing a personal injury claim following an auto accident.
Before you can be convicted of California perjury, the prosecutor needs to demonstrate each element of the offense. If the prosecution fails to provide evidence of guilt, you can't be convicted.
The key elements the prosecutor needs to demonstrate are as follows:
- When you made the statement, you had the intention of presenting false testimony.
- The alleged details were important.
- You were aware that you were lying while under the court's oath.
- You knowingly testified that the false claims made were accurate.
The crime of perjury is classified as a felony under California law. The maximum sentence for the crime is four years behind bars. Additionally, the conviction could affect your right to buy or own a firearm. If you are found guilty of a California felony crime, you will not be allowed to possess any firearms.
Conspiring to carry out a crime is considered illegal under California Penal Code 182. This is a felony offense that can be filed alongside Unemployment Insurance fraud. You can be charged with this crime if you agree to engage in a crime with another individual.
The specific facts of the case will determine whether or not there will be a conspiracy conviction. The court could consider you guilty of conspiring to perpetrate UI fraud. If this applies to you, you could serve a 12-month sentence.
If you are found guilty of conspiring to commit theft by the court, you will be subject to formal probation and a maximum of 60 months in prison. You will also be held accountable even if you did not commit the offense that you conspired to engage in.
Grand theft is defined by the law as taking another individual's property that is worth more than $950.
Grand Theft by Pretense
According to California PC 532, grand theft occurs:
- When you intentionally give someone inaccurate information which misleads them.
- When you use deception to get victims to let you take their belongings or property.
Grand Theft by Larceny
Larceny is defined under California law as taking another person's physical property without their permission. When you're in control of the tangible property, you prevent the property owners from gaining value or a piece of it.
Grand theft is classified as a wobbler violation under California law. Therefore, you could be charged with a misdemeanor or felony. The prosecutors will look at the specifics of the offense and your prior criminal history when deciding whether to charge you.
A misdemeanor conviction can result in no more than a 12-month jail sentence. If found guilty of a felony offense, your sentence will be either sixteen months, twenty-four months, or thirty-six months behind bars.
Find a Fraud Crimes Defense Lawyer Near Me
If you're facing charges for perpetrating unemployment insurance fraud in violation of California's UIC 2101 or PC 550, you can contact the Chula Vista Criminal Attorney. We will assess the specifics of your case and start developing a defense plan that can assist in obtaining the best possible outcome. Call us today at 619-877-6894.