Ohio has joined a consortium of other states and other public and private agencies called the Unemployment Insurance Integrity Center of Excellence, Johnson said. The center’s mission is to help identify and prevent fraud as well as reduce improper payments and improve payment accuracy.
Over the past few years, the state has increased the number of full-time fraud investigators from 54 to 67 which are are all federally funded, Johnson said. These employees are responsible for fraud prevention, detection, investigation and collection.
The state has also started using a number of data mining and databases to detect fraud, Johnson said. One of those tools is a national database in which employers report new hires and those names are continuously cross-matched with claimants in the database.
The state also established a website last November and a toll-free tip line for people to annonymously report possible unemployment benefits fraud, Johnson said. Job and Family Services receives about 90 fraud tips per week at (800) 686-1555 toll-free line and about 20 fraud tips per week at unemployment.ohio.gov/fraud.stm, he said.
Job and Family Services has referred 195 cases to county prosecutors over the past 12 months. The department referred 15 cases in Montgomery County, two in Warren County, three in Greene County, none in Miami County, three in Clark County and one in Champaign County.
County prosecutors rarely follow up with Job and Family Services on what the outcomes were on referral cases, Johnson said.
In one case, A Franklin man was indicted Aug. 16 by a Warren County grand jury on several charges. Christopher Stacey, 55, allegedly received unemployment benefits between April 2012 and November 2012 while he was employed, according to the indictment.
Warren County Prosecutor David Fornshell said Stacey allegedly received $11,513 or $397 a week in unemployment benefits during that time period while he was still working for a company in Milford.
Stacy was indicted on one count of theft, a fourth-degree felony, seven counts of falsification, all first-degree misdemeanors, and one count of telecommunications fraud, a third-degree felony. He is scheduled to be arraigned Friday in Warren County Common Pleas Court.
Fornshell thinks this type of fraud is happening more than what is being reported.
“While the state is able to compare records, that still doesn’t hit on people working under the table or employers not reporting information,” he said. “It’s probably more prevalent than what ultimately results in a referral for prosecution.”
Unemployment fraud remains a multi-billion-dollar problem nationwide. Fraudulent unemployment benefits payments totaled about $3.3 billion in 2011 and the largest share, about $2.2 billion, was paid to people who were still working, according to a report issued by the St. Louis Federal Reserve. The report said the federal government spent $108 billion in unemployment payments in 2011.
“The biggest single way to commit fraud is that when people return to work, they don’t tell the state as they try to collect a paycheck and unemployment benefits,” Johnson said. “Some people come up with complicated schemes.”
He also said there instances where overpayments are made that are not criminal fraud but are honest mistakes because of misinterpretation or misunderstandings about the rules. In those cases, Johnson said the state will work to collect the overpayments.