Unemployment insurance fraud is a non-violent white-collar crime. It involves acts of concealment and deceit to acquire money unlawfully. Being charged with this type of fraud in Los Angeles can have a significant impact on your freedom and life. You could face a lengthy sentence and pay a hefty fine. We invite you to speak with qualified attorneys at the Los Angeles Criminal Lawyer if you are facing fraud charges. We will work to have your charges reduced or dismissed so that you don't have to pay extensively for wrongful accusations.
Understanding Unemployment Insurance Fraud
Unemployment insurance fraud happens when a person gives false details, intentionally hides facts, or presents false identification tailored to acquire or to increase benefits, or to refute benefits to a qualified employee.
The California Unemployment Insurance Code controls this crime, and if convicted, you are likely to face severe penalties like several years in California state prison.
Read the article to get a better understanding of this offense and how it is prosecuted in California.
Also known as UI, unemployment insurance is an insurance program that was established in 1935. The employer tax contribution funds the program.
The Employment Development Department manages the program. The program seeks to assist individuals who have lost their employment not because of their fault to make their ends meet for a year as they continue to search for new employment. A beneficiary can receive a payment that ranges between forty dollars to four hundred and fifty dollars per week.
To be eligible for unemployment insurance benefits, a person ought to be:
Unemployed (The individual should wait to bring the claim until they are not working anymore. They can't bring an expectation of the last day of their work) or their hours have been involuntarily lowered to less than full time
Actively seeking employment
Physically capable and ready to work straight away
Have been working in the last eighteen (18) months
Even though UI is tailored for employees who have been laid-off not because of their fault, there are provisions in the law that can permit an individual who was fired or quit to receive the benefits. Under these kinds of circumstances, the EDD determines eligibility for each case. Therefore, only the EDD can address all any questions and concerns regarding these circumstances.
Like most public coverage programs, people regularly take advantage of the benefits. As a result, this both increases the costs for companies and creates a buildup in the system that leads to longer waiting times for persons legally entitled to the benefits.
Reasons for Unemployment
As previously stated, to qualify for UI benefits in California, you should be out of employment through no fault of your own. Here are three reasons for unemployment:
You are eligible for unemployment benefits if you lost your work in a reduction in force or got downsized due to economic reasons.
You can obtain UI benefits if you were fired because you were not a suitable fit or did not have the required skills to perform the job. However, you cannot receive the benefits if you were fired due to misconduct. In Los Angeles, misconduct makes you ineligible if all the statements below are correct:
You owed a material duty to your boss. In other words, a duty that is part of your job like going to work
You significantly breached the duty (you did not perform your responsibility)
The breach of that duty proved a willful disregard or wanton for the duty You were not thoughtless or careless but intentionally violated that duty
The breach of duty harmed your company's business interests
If an individual quits their work, they will not qualify for unemployment coverage benefits unless they have a good cause (a reasonable individual who wanted to work would have left under similar circumstances).
Typical good reasons include unlawful discrimination, hazardous working conditions, employer's fraud, or harassment. In this case, you should have taken steps to resolve the state of affairs before leaving.
The EDD often gets tips from:
The field offices which collect the unemployment insurance application. For instance, an EDD worker may notice a counterfeit department seal
The general public can report fraud via the site or hotline
After fraudulent conduct is suspected, the California EDD fraud investigation unit investigates the accusations.
If you falsely claimed that you are looking for employment, the EDD could reach one of the companies you supposedly applied to and check whether you genuinely did apply. If you are suspected of providing another person's identity, the investigator can trace the identity of the other person. Other ways of catching fraud include:
Looking at wage records surrendered to the tax division
Encouraging the public to call on the hotline anonymously
Using surveillance videos
Should the unit get adequate proof to persuade the prosecuting authority to bring a criminal charge, it will submit its report to the authority. If the unit thinks its claim will be rejected, it will keep the file if it can collect more proof against the defendant.
What are the Most Common Instances of UI Fraud in Los Angeles?
There are numerous ways in which you can break the UI fraud law. They include:
Working at the same time collecting the UI benefits and failing to report your employment to the EDD
Receiving other forms of compensation like workers' compensation benefits or pensions without reporting the compensation to EDD
Living in California and attempting to get fraudulent unemployment insurance in another state
Generating a fabricated boss and highlighting yourself as a worker who qualifies to collect UI benefits
Using a fake name, employment details, or social security number while you are working and at the same time collecting unemployment benefits (Hinging on the case circumstances, you could be charged with identity theft)
Cashing another person's unemployment check while you have not been authorized
Indicating that you are diligently searching for work while in reality, you aren't
Misrepresenting the reason you're not working anymore (For instance, a defendant claiming that they lost their employment as a result of cutbacks while they were fired due to poor job performance).
As an employer, you can also break the law in question when you:
Deliberately give false details why a worker was fired, or regarding their wages as a way to avoid paying the UI program contributions, or
Intentionally withholding deductions from your workers and willingly failing to submit the funds to the California EDD.
Penalties Attracted by UI Fraud
The punishment you receive depends on the crime you have committed. Penalties are different since most fraud crimes are wobblers. A wobbler is a crime that the prosecution can choose to charge either as a felony or a misdemeanor depending primarily on:
Criminal history, and
Discussed below are misdemeanor and California felony consequences imposed concerning unemployment insurance fraud:
Unemployment Insurance Code 2101
If unemployment insurance code 2101 is charged as a California misdemeanor, you will face up to twenty thousand dollars in fines and a year in jail.
A felony, on the other hand, carries:
Sixteen months, two (2), or three (3) years in prison
Up to twenty thousand dollars in fines
General Insurance Fraud (Penal Code Section 550)
If you are convicted of this crime, the defrauded amount determines the consequences you face. UI fraud is considered a misdemeanor in case the defrauded amount is below nine hundred and fifty dollars. If this case, you will face:
A maximum of six (6) months in jail
One thousand dollars in fine
If the offense is above nine hundred and fifty dollars, the offense is considered a wobbler. In case the fraud amount surpasses nine hundred and fifty dollars, and you are found guilty of a misdemeanor, the penalties are enhanced to:
Up to a one-year jail sentence
Ten thousand dollars in fine
Should the fraud amount:
Surpass nine hundred and fifty dollars, or
Surpass nine hundred and fifty dollars in any twelve-month consecutive duration,
the prosecutor can decide to prosecute you with a felony. In that case, you will:
Pay fifty thousand dollars in fines
Spend two (2), three (3), or five (5) years in county jail
Moreover, if convicted, you will face:
Repayment of the benefits together with a thirty percent penalty
Disqualification to collect or retain paid benefits
Professional discipline (A criminal conviction could affect professional license, particularly if the offense is well-thought-out to be an offense of moral turpitude)
Restitution in place of a Criminal Charge
Depending on your case's facts, your experienced defense lawyer can make arrangements that you pay compensation to the EDD in return for the agency failing to bring a criminal charge against you.
In case the agency fails to file charges against you and you pay timely, you won't face the charges. Nonetheless, if you fail to pay any payments, the agency could institute a criminal proceeding anytime.
How to Fight the Charges
There are several ways that a competent criminal defense lawyer can use to beat UI fraud benefits. These legal defenses include:
The Defendant Did Not Have Fraudulent Intent
To be convicted of fraud in California, the prosecutor should prove beyond any reasonable doubt that the defendant purposed to commit the offense. That means if they cannot establish that the defendant behaved with an intent to defraud, the defendant cannot be punished for the offense.
For instance, you should be held responsible for breaking the UI benefits fraud law because you did not deliberately act with fraudulent intention in the following instances:
You think you presented a lawfully claim
You did not notice that you should report your freelance income to the California EDD
You accidentally gave the incorrect information (it could be writing the incorrect social security number)
Fraud cases are rapidly increasing, and as a result, both the state and the federal government respond by aggressively prosecuting fraud claims. Due to the pressure to file cases, investigators and prosecutors are often quick to make a judgment.
For instance, in case somebody else is tasked with managing your employee's payroll and they have been deducting funds allegedly to submit to EDD but instead embezzled the money, then there is no sufficient evidence to sentence you.
Mistaken Identity or False Accusations
Proving innocence is the best defense. Innocent persons get arrested for fraud every day due to numerous reasons.
Maybe a person in your workplace filed for a deceitful claim, and when questioned, they attempted to escape liability by placing the blame on you. Or you are an identity theft victim, and consequently, you are also a mistaken identity victim because you did not submit the fake claim.
Any experienced defense attorney has experienced a similar case before. Therefore, they know how to reveal the essential facts to pardon a wrongly accused person.
If all the above legal defenses fail, your defense lawyer can try negotiating a plea bargain. A plea bargain can also be effective:
If you cannot escape criminal accountability
There are gaps in the prosecutor's case, mitigation factors, or a lot of cases in the system
The plea bargain will let the prosecutor convict you and permit you to plead no contest or guilty to a lesser charge or lesser punishment in return for dismissal of your unemployment benefits fraud charges.
Since this type of fraud involves accusations of forgery, perjury, and theft, the prosecutor can choose to file the charge in place of or alongside the following offenses:
Grand Theft (Penal Code Section 487)
According to PC 487, it is illegal to take an entity or somebody else's property whose value exceeds nine hundred and fifty dollars. The term "property" comprises land, personal property, labor, or money.
That means if you deceitfully collect unemployment insurance benefits that surpass $950, the prosecutor can prosecute you with a wobbler. You are likely to face a fine of ten thousand dollars and a three-year jail sentence.
Forgery (Penal Code Section 470)
Under PC 470, it is illegal to alter, use, or create written documents with an intent to engage in fraud.
In other words, if for instance, when applying for UI benefits:
You sign for the company or your supervisor, or
By signing the name of another person as the applicant,
the prosecutor can also elect to bring a forgery charge. If found guilty of breaking the forgery law, you face a California wobbler that carries:
Ten thousand dollars in fine
A three-year jail sentence
Perjury Law (Penal Code Section 118 PC)
A person violates the perjury law when they intentionally provide false details while under oath to be honest. It is a felony that is punishable by a four-year jail sentence and a fine of ten thousand dollars.
Law against Forging, Counterfeiting, or Possessing a Fraudulent Public Seal
Violating Penal Code Section 472 is charged as a wobbler. It carries the following potential penalties:
A fine of ten thousand dollars
A maximum of three (3) years in jail
If you fake or forge a public seal on a counterfeit unemployment insurance application, the prosecutor can prosecute you with Penal Code Section 118 alongside UI fraud.
Conspiracy Law (Penal Code Section 182)
PC 182 makes it illegal to conspire to violate the law. If a defendant conspires with somebody else, it means the defendant agreed to engage in illegal conduct so that the person can either deny lawfully UI benefits or acquire fraudulent UI benefits.
It is a felony, and it carries the same punishment as unemployment insurance fraud.
Frequently Asked Questions
Can you Refuse a Job Offer and be Able to Collect Unemployment Benefits?
You can still receive unemployment insurance benefits after refusing to take a job offer provided the job offered is not suitable employment. Employment with extremely low wages or demanding physical requirements is not suitable.
However, if the job is less desirable than you would want, you have to choose whether to take the job or go without the benefits.
Is It Essential to Have a Criminal Defense Attorney?
Another common question asked by those charged with UI benefits fraud is whether they should engage a defense lawyer. The concern is the cost linked with having an attorney. Nonetheless, often the lawyer fees are insignificant compared to the life-altering costs that are due to a conviction.
The following are reasons why you need a lawyer:
Your attorney is familiar with the judicial system
They have previously experienced a similar case
They have a relationship with the prosecution team
They will advise you on the possible outcome
They will help you make objective decisions
Find An Los Angele Criminal Defense Lawyer Near Me
California fraud charges carry different penalties apart from the usual court fines and sentences. For instance, it will be hard to find employment since companies will view you as dishonest and untrustworthy and will not want to risk being defrauded. If convicted of unemployment insurance fraud, you need to contact Los Angeles Criminal Lawyer. Our legal team can protect your rights as well as develop practical legal defenses that will get you the best possible results in the case. To review your case, call us today at 310-502-1314.