Unemployment Benefits have been helping many people who have lost their jobs for no fault of their own. The insurance helps these people manage their bills as they seek other employment. Without this insurance, many people, and their families, would suffer much. However, this is a type of insurance that many fraudsters have targeted to benefit more than they should. For that reason, the police are always on the lookout, ready to arrest anyone suspected of insurance fraud.

Unemployment insurance fraud is among the many fraud crimes we handle at The LA Criminal Defense Law Firm. We know how easy it is for a person to be accused of fraud while they acted with no fraud intent. If, therefore, you are facing charges for UI Fraud, get in touch with us. Our criminal defense attorneys have extensive skills and knowledge that could deliver a fair outcome from your case.

Understanding Unemployment Insurance

The unemployment insurance program is a Federal-State coverage that offers unemployment benefits to individuals who are eligible for employment but do not have jobs for a fault that is not their own. These individual’s eligibility for unemployment benefits is determined under state laws. The benefits are meant to provide some temporary financial assistance to the unemployed worker to ensure that they are taking care of their needs and those of their families before they can get gainful employment.

In the state of California, this Unemployment Insurance Program is managed by the state’s Department of Employment Development. This program was launched in 1935 and has since been funded by tax contributions from employers. Employed workers who lose jobs in California through a fault that is not their own can significantly benefit from this program. The program gives them financial assistance for a minimum of one year on condition that they aggressively continue looking for new employment. Those who can benefit from this program can get an amount ranging between $40 and $450 every week.

Certain conditions must be met for a person to be eligible for the unemployment insurance benefits in California. Some of these are:

  • That the person must be out of work. State laws require a person to wait until they are no longer employed for them to file a claim. You cannot place a request for the benefits if you are anticipating losing your job or on your final day at work. Note that people whose working hours have been involuntarily reduced at work from full-time to a few hours less can also file a claim for these benefits.
  • The applicant must be actively searching for work at the time of filing a claim
  • The applicant must always be physically and emotionally ready to take a job immediately they get one
  • The applicant must have been in employment in the previous eighteen months

Even though unemployment coverage is strictly for unemployed workers who lost their careers for a fault that was not their own, there are specific provisions of the law which might allow an individual who was fired or one who quit their job to receive these benefits. Under these conditions, though, eligibility will only be determined by the EDD and is dealt with on a case-to-case basis.

There are problems, though, just the same as those experienced with other government insurance funds. Certain people will take advantage of such insurance benefits, to unlawfully benefit from them, yet they have not met all the stated requirements. The problem with this is that it denies other eligible individuals a chance to get some financial assistance when they need it. It also increases the cost for employers who are already contributing to the program. That is why there are strict rules against insurance fraud, to minimize such cases as these and only ensure that those who qualify for these benefits are getting financial aid at the right time.

Understanding Insurance Fraud

Insurance fraud involving unemployment benefits has been around for a while now. However, it has recently risen as more and more people look for fraudulent ways to benefit from federal and state programs. There are many ways through which this kind of fraud is committed, including the use of false documents to obtain or increase financial assistance from the insurance programs. The California State Unemployment Insurance laws are already in place to help regulate this kind of fraud. Today, anyone found guilty of cheating the system can face prosecution, and eventually receive a severe punishment, which may include several years of imprisonment.  

If any person is under suspicion of committing unemployment insurance fraud in California, the state’s EDD will be the agency that will be expected to conduct investigations against those allegations. The department receives several tips when fraud is detected, some of which come from:

  • The members of the public. Information could come through the hotline services provided by the department or the department’s website, on the report fraud page
  • From EDD field officers. The department often sends out its officers to collect applications for unemployment insurance benefits from eligible persons. If one or more claims raise suspicion (for instance, there is a forged signature or department seal), the officers can report their suspicion and launch an investigation immediately.

Once the department suspects fraudulent acts in any of the applications or those that have already been funded by the insurance program, its investigation unit will come in immediately and look into the claims. If the unit uncovers more evidence, it will report its findings to the agency. The local prosecuting body will then be compelled to submit criminal charges against the suspect. If the agency feels that their claims will be rejected, it might decide to keep the file in the event more evidence is obtained against the suspected offender. However, if the investigation unit gathers sufficient evidence, the suspect will immediately be arrested to face criminal charges. 

Examples of Incidents that Qualify as California UI Fraud

UI fraud is a severe offense in the state of California. There are several ways in which the laws governing UI programs in the state can be violated. Here are examples that show how the most popular of these offenses are committed:

Claimant Violations

Employees or claimants can violate California UI laws in many ways, such as:

  • Collecting unemployment benefits while you are still working. It is not allowed as only unemployed workers are supposed to claim for these benefits. If you have started working, the law requires you to report to the state's EDD immediately so that another beneficiary could get considered. If you work and at the same time collect the insurance benefits, you will be benefiting at the expense of other unemployed workers and employers who pay tax to fund these programs.
  • You are collecting other kinds of benefits without reporting it to the California EDD. There are different types of benefits that are available for the unemployed in the state of California. These are, for instance, workers' compensation and pension benefits. If you are receiving other benefits, the law requires you to report it to the state EDD. Failing to do so is a violation of the UI laws.
  • You are using a fake name, employment information, or SSN to collect unemployment benefits even though you continue working. If you are found guilty of using fraudulent information to defraud an insurance provider, you could also face charges for identity theft.
  • Trying to fraudulently obtain unemployment benefits in a different state while you are still living in California
  • Creating a false employer and enlisting yourself as one of his/her employees to make yourself eligible for unemployment benefits
  • Cashing another person’s UI benefits check without their authorization
  • Pretending to be actively looking or employment while you aren’t even bothered so that you can continue collecting UI benefits
  • Giving false reasons why you aren’t employed anymore. For example, saying that you got laid off from your previous employment while in actual sense you were fired for poor performance

Employer Violations

UI fraud is not an offense that is only committed by employees who only want to benefit more than they should from the insurance program. Employers are also capable of committing this kind of offense in these ways:

  • When an employer intentionally provides incorrect information as a reason why his/her employment was ended, or their wages so as not to contribute some money to the insurance program
  • When an employer knowingly withholds his/her employees’ deductions so that he/she will not pay them to the EDD as required by law

Penalties for California UI Fraud Conviction

The kinds of sentences a defendant gets for a UI fraud conviction in California is determined by the type of offense he/she has committed. There are all kinds of penalties to expect, mainly because most fraud offenses in California are wobblers, which means that they can be convicted as either misdemeanors or felonies. The type of conviction one would face will be based on the following:

  • The circumstances surrounding the specific case
  • The defendant’s criminal history

Here are some of the common felony and misdemeanor punishments that are imposed on crimes related to UI fraud in California. These penalties are usually imposed concerning the following types of UI fraud laws:

  • Section 2101 of the state’s Unemployment Insurance Law. This is the most popular law regarding UI fraud in the state of California
  • Section 550 of the California Legal Code. This is the gravest offense concerning UI fraud. This law regulates the general issues that involve insurance fraud in California

It is worth noting that your verdict might vary, subject to the exact charges you are facing.

Penalties for UI fraud conviction under Section 2101 of California Unemployment Insurance Laws

If you are found guilty under Section 2101, then the prosecutor will convict you with a misdemeanor offense. The penalties you are likely to face for this conviction include:

  • Jail time for a maximum period of one year
  • Fines of not more than $20,000

If by any chance you get a felony conviction or this offense, the penalties will be more severe and might include:

  • Imprisonment for 16 months, two years or three years
  • A fine of not more than $20,000

Penalties for UI fraud conviction under the overall Insurance Fraud law (Section 550 of California Statutes)

Again, you can either get a misdemeanor or a felony conviction under this law if you are found guilty of UI fraud in California. The total amount of money involved in the scam will determine the kind of sentence you get. For a misdemeanor conviction, for instance, the fraud amount involved in the case must be $950 or lower. If that is the amount in the case, the defendant is likely to get a maximum of six months behind bars and a fine of not more than $1000.

If, on the other hand, the fraud amount surpasses $950, the offense will be a wobbler. If the fraud amount in the case is more than $950, and the offender is lucky to get a misdemeanor conviction, the sentence is likely to be one year behind bars and a maximum fine of $10,000.  Felony penalties are likely to be stiffer than those, and the verdict is given out as follows:

If the fraud amount was more than $950 or goes beyond $950 in twelve consecutive months, the prosecutor is likely to give you a felony conviction. If that happens, the possible penalties will be:

  • 2, 3 or 5 years in jail
  • A fine of not more than $50,000 of double the fraud amount, whichever is more

In addition to the penalties listed above, UI fraud is a serious offense that attracts additional penalties such as:

  • Professional discipline: Note that most criminal convictions will affect a person's professional licenses. It is more so because UI fraud is classified under the moral turpitude offenses, just the same as other fraud offenses. It means that you might face professional discipline upon conviction
  • You may be rendered ineligible to obtain or even retain paid benefits in the state
  • You may be required to pay back all the benefits you received, with a penalty of 30%

Payment of Restitution in Place of Facing Criminal Charges

There is a possibility of being required to pay back all the money you have defrauded the unemployment benefits program instead of facing criminal charges. It will, however, depend on the facts of your case. It will also call for the help of an experienced criminal defense attorney. If that is a possibility in your case, your attorney will organize for you to make payments for restitution to the state's EDD, for the department's assurance that it will not file any criminal charges against you.

If the EDD settles for that, and you start by making the payments on time, you might be free of the charges sooner than you could have expected. But, if you fail to make any of those payments, the department may have no other option but to file charges against you at any time. It is another good reason to work closely with a competent criminal defense attorney.

Possible Legal Defenses for California UI Fraud Charges

Insurance fraud is a grave offense in California, one that could leave you facing several years of imprisonment, especially if a large sum of money is involved. Other than that, this is an offense that could ruin your career and social life. For that reason, it is crucial to find ways in which you can fight your charges if you are already facing charges for UI fraud in California. The help of an experienced criminal defense attorney will go a long way. The good thing is that there are several possible legal defenses that such an attorney can use to better the outcome of your case. Some of these are:

You did not have any fraudulent intentions

For a person to be found guilty of any type of fraud offense, the prosecutor must prove that they had fraudulent purposes when they acted the way they did. If that is not the case or the prosecutor is not able to prove their fraud intent, the court may have no other choice but to dismiss the case. If, for instance, you submitted a claim for unemployment benefits believing that your request was legit, you may not be found guilty of fraud. Again, there are times some people accidentally submit the wrong information, such as an incorrect Social Security Number. If any of those is correct, you are not guilty of UI fraud. 

Another example is if you did not report your freelancing earnings to the EDD, thinking that it was not necessary. With no clear fraud intent, you should be set free with no additional charges.

Lack of sufficient evidence

As with all other criminal offenses, the prosecutor is required to prove all the elements of a crime beyond a reasonable doubt for the defendant to be found guilty of the crime. If the amount of evidence gathered against the defendant is not enough, the prosecutor will not be able to prove the case, and that means that the court cannot find the defendant guilty. Again because of the rising cases of UI fraud in the state, investigators are rushing to make arrests even without enough evidence to prosecute those that are arrested.

With the help of an experienced criminal defense attorney, you should be able to convince the court that the evidence gathered against you is not enough to convict you of any crime. Since that is the law, the court will have no choice but to dismiss your charges.

Mistaken identity or false accusations

Some so many people have been accused falsely for offenses they did not commit. Others have already been convicted of offenses they did not take part in. The unfortunate bit is that people get falsely accused of crimes every day, and until you can prove your innocence, you may get convicted. An experienced criminal defense attorney should be able to conduct a thorough investigation into the matter to determine your innocence. If someone was trying to get away with fraud by blaming it on you., a smart attorney should be able to uncover the truth in no time.

Some people are victims of identity thefts, and through such acts, they are mistaken for the real culprits, while in the real sense, they did not benefit from the fraud. If that is the case, the court will drop your charges and order the police to go after the real culprit.

A plea bargain

This would help if the court already has enough evidence to convict you of UI fraud. In that case, your criminal defense attorney will try and negotiate a plea bargain with the court. If the court agrees, you will plead guilty or nolo contendere to the charges you are facing. Then the court will reduce your sentence to a less-serious offense. Plea bargains are quite common and very useful, especially if there is no way out for a defendant, and the type of crime they are facing is serious.

If you are lucky, the court can agree to dismiss a severe case of UI insurance and maybe order you to pay restitution to the UI program. Remember that you will be required to keep the end of your bargain if you do not want to be rearrested and charged with the same offense in the future.

Find a Los Angeles Criminal Defense Law Firm Near Me

Unemployment Insurance Fraud is the kind of criminal offense that can affect many aspects of your life, including your professional career. For that reason, you need the best help in fighting your charges. At The LA Criminal Defense Law Firm, we have a team of well-trained and experienced criminal defense attorneys who can take up your case. Depending on the facts of your case, we could convince the court to either drop or reduce your charges. Call our Los Angeles criminal lawyer at 310-935-1675, and let us prepare a compelling defense for you.