Unemployment insurance fraud laws are covered under California Unemployment Insurance Code Section 2101 and Penal Code Section 550.
In California, the unemployment insurance program is specifically designed to assist people who lost their job through no fault of their own. It's supposed to give you some financial relief while you are looking for another job.
However, it's not available to everyone, such in situations where you voluntarily quit your job or were terminated under certain circumstances.
The program will pay up to $450 per week for up to one year.
This unemployment insurance program is run by the California Employment Development Department, commonly known as the EDD.
In basic terms, unemployment insurance fraud occurs when you:
- receive unemployment benefits you are not entitled to receive, or
- where you might assist another person to receive them.
This criminal offense could occur by providing false information, concealing material facts, or give a fake identification with the intent to receive benefits.
Example of unemployment insurance fraud
A common example of unemployment insurance fraud occurs in situation where an individual finds new employment, but at a much lower wage, and still receives unemployment benefits while they are getting paid from their new job.
This is widely known as “double-dipping” and considered unemployment insurance fraud under Insurance Code § 2101 and § 2102.
In order for Los Angeles County prosecutor to prove you committed unemployment insurance fraud, they have to be able to show you:
- made a willful, false representation, concealment, or
- false identification in order to receive benefits under the California state and federal programs.
If you have been accused of unemployment insurance fraud, you need to contact the Los Angeles criminal defense attorneys at Eisner Gorin LLP. Now that we have covered a general overview of unemployment insurance fraud, let's examine eligibility, legal definitions, penalties, and potential legal defenses below.
Eligibility for Unemployment Benefits
As discussed above, unemployment insurance benefits exist to temporarily help people who have lost their job.
The weekly amounts they may receive will vary depending on different factors, but the maximum amount is $450.
Eligibility is determined by the EDD on an individual case basis, but in order to be eligible to receive benefits, there are certain conditions, including:
- You were employed for the past 18 months
- You are currently unemployed
- You are currently seeking new employment
- You are currently willing and physically able to work
In Los Angeles County, many people decide to take an unlawful advantage of the unemployment insurance benefits.
When this occurs, they have committed insurance fraud. If you know you are under a criminal investigation for unemployment insurance fraud, contact our Los Angeles criminal defense law firm to discuss your situation.
Unemployment insurance fraud occurs when someone gives false information in a deliberate attempt to conceal facts or they give false identification to receive or increase unemployment benefits.
It's important to note this fraud crime can be committed by the worker and the employers.
There is wide range of examples where someone could commit unemployment insurance fraud, but the most common include:
- You work another job while receiving unemployment compensation
- You fail to report to EDD you are collecting workers' compensation
- You used a fake identity to receive unemployment benefits
- You live in California, but attempt to receive benefits in another state
- You cash an unemployment check of another person without permission
- You created a fictitious employer and listed yourself eligible for benefits
- You are not seeking new employment, but claim you are on the form
- You give false information for why you are not employed
As mentioned above, employers can also violate California's unemployment insurance fraud laws.
This can occur when they provide false information to the California Employment Development Department (EDD) about the reason why an employee was terminated, or about their wages in an effort to avoid paying unemployment insurance compensation.
They can also commit fraud if they failed to send payments to EDD after deducting funds from the employer's pay for unemployment benefits that are legally required.
Investigating Unemployment Insurance Fraud
The California Employment Development Department (EDD) is typically responsible for investigating accusations of unemployment insurance fraud.
Many of their tips come from the public and their local field offices that process the initial applications. As noted above, the alleged fraud can come in many forms.
It could be a case where you are alleged to have used a false employer identity. In this type of case, they will contact the employer to verify the information you submitted. It could be an allegation that you gave false information about actively seeking new employment.
Again, EDD will make contact with the potential employers you listed on the form in an effort to verify you actually applied for a job.
If the allegation is that you used another person's identification, the EDD investigator can typically uncover the truth pretty easily. In some unemployment fraud investigations, they will even use surveillance videos.
If they have reasonable belief any type on insurance fraud has been committed, their fraud investigation unit will examine the accusation and evidence.
During their investigation, if they discover sufficient evidence of unemployment insurance fraud, they will submit their findings to the Los Angeles County Districts Attorneys Office in an attempt to convince them to file criminal charges.
What are the Legal Penalties?
The potential legal penalties for unemployment fraud will depend of the specific offense. In California, most fraud related cases are known as a “wobbler.”
This means the Los Angeles County prosecutor can file the criminal case as either a misdemeanor or felony crime.
Their decision on how to file the case will depend on the specific circumstances, amount of the fraud on your case, and prior criminal record.
It is possible to be convicted of unemployment insurance fraud under more than one code section of California law.
California Unemployment Insurance Code 2101
For example, under Unemployment Insurance Code Section 2101, it's a crime to willfully make a false statement, hide material facts, or use a fake ID, such as a false Social Security Number, to receive benefits.
This type of fraud case is a wobbler, and if you are convicted of a misdemeanor offense of UI Code 2101, you could face:
- Up to one year in a Los Angeles County jail,
- A fine up to $20,000,
- Informal summary probation.
If you are convicted of a felony case of UI Code 2101, you could face the following legal penalties:
- 16 months, 2 or 3 years in a California state prison,
- A fine up to $20,000,
- Formal felony probation.
California Penal Code Section 550
Penal Code Section 550 is the general insurance fraud statute in California. If the Los Angeles County prosecutor decides to file criminal charges against you under this law, the exact amount of fraud will determine the legal penalties.
If the total amount of unemployment insurance fraud is under $950, it's a misdemeanor crime that can carry a sentence of 6 months in county jail and a fine up to $1,000.
If the total amount of fraud is more than $950, it's a felony offense under Penal Code 550 and the legal penalties include:
- 2, 3, or 5 year jail sentence,
- A fine up $50,000, or double the amount of fraud,
- Formal felony probation.
It should be noted that a conviction for unemployment insurance fraud could impact a professional license you may have as it's considered a crime of moral turpitude, which applies in all California fraud related convictions.
Additionally, if you are convicted of for unemployment insurance fraud, you will be required to pay EDD back the money you received unlawfully and it will include a 30% penalty on the amount received.
There are situations where our Los Angeles criminal defense lawyers could make an agreement with the EDD that you will make reimbursement payments in exchange for them not to pursue criminal charges.
- California Penal Code Section 470 – Forgery
- California Penal Code Section 472 – Forging/Possessing Counterfeit Seal
- California Penal Code Section 487 – Grand Theft
- California Penal Code Section 118 – Perjury
What are the Legal Defenses?
Our Los Angeles criminal defense attorneys can use our decades of experience on your behalf to defend your against all types of charges of California unemployment insurance fraud. Every case is unique and all legal defense strategies will be depend on the specific facts of your case.
However, the most common legal defenses include:
No fraudulent intent – It's important to note the Los Angeles County prosecutor has the burden to prove, beyond any reasonable doubt, you willfully presented false information or identification with the intent to unlawfully receive benefits. In other words, there must be a specific intent to defraud.
Our criminal attorneys might be able to make a successful argument that you had a reasonable belief you submitted a legitimate unemployment insurance claim, or you might have accidentally gave EDD incorrect information, meaning it was an honest mistake.
If we can cast any reasonable doubt about your intent, you have a good chance of avoiding a conviction for violation of California's unemployment insurance fraud laws.
Insufficient evidence – Our law firm has seen overly aggressive prosecutors who rush to judgment in pursuing fraud allegations. Remember, they must have sufficient evidence to find you guilty beyond a reasonable doubt. In certain cases of unemployment insurance fraud, our lawyers could make the argument there is simply insufficient evidence to prove you are guilty.
Negotiating a plea bargain – Let's face facts. There are cases of unemployment insurance fraud where your guilt is not in doubt. In other words, the evidence is obvious and overwhelming and there are no legitimate legal defenses.
In these types of situations, our criminal defense lawyers could attempt to negotiate a favorable plea bargain with the Los Angeles County prosecutor.
A plea bargain is a very effective tool to minimize liability when there are no weaknesses in the fraud case against you. In exchange for your “guilty” or “no contest” plea, the prosecutor could agree to a reduced criminal charge and sentence.
Contact our Los Angeles Criminal Lawyers
If you have been accused of committing unemployment insurance fraud in violation of Unemployment Insurance Code Section 2101or Penal Code Section 550, you need to remain silent and contact the Los Angles criminal defense law firm of Eisner Gorin LLP.
Let's our seasoned attorneys thoroughly review the details in order to start planning a strategy to obtain the best possible outcome.
Contact our law firm at 877-781-1570.
Related Pages: White Collar Crimes