Schemes to Swindle State Unemployment Agencies on the Rise

September 19, 2017

Schemes to Swindle State Unemployment Agencies on the Rise

Internet fraud is a significant threat everywhere. Concurrently, the proliferation of intricate fraud schemes against state unemployment agencies by organized crime is also on the rise. Nationwide, since 2012, the Department of Labor Office of Inspector General (DOL/OIG), Office of Labor Racketeering and Fraud Investigations reports conducting over 750 major unemployment compensation (UC) investigations that resulted in “1,200 criminal convictions that created over $67.5 million in improper UC payments”.

Historically, there has always been a certain amount of individual fraud related to UC payments but advances in technology have made it easier for multi-claimant scams to financially impact state agencies. The proliferation of organized crime efforts takes advantage of specific state vulnerabilities using stolen personal claimant identification and the anonymity of the Internet. For example,
[list type=”circle”]
[item]Southern California Man Found Guilty in $5 Million Unemployment Insurance Fraud Scheme[/item]
[item]Former Illinois Tax Preparer Sentenced to Four Years in Prison for Obtaining More Than $315,000 Through Identity Theft/UI Fraud[/item]
[item]Florida Man Sentenced to 84 Months in Prison for Identity Theft Scam to Obtain More Than $585,000 from the Florida Department of Economic Opportunity and the IRS[/item]

State administrators throughout the country are partnering now, more often, with local law enforcement, FBI and DOL/OIG for the purpose of investigating criminal fraud in their UC programs. Should you know of or suspect wrongdoing as it relates to UC benefit payments, please contact your unemployment claims administrator.

Reference: Employment and Training Administration, Advisory System, U.S. Department of Labor, Washington, D.C. 20210, Subject: “Disclosure of Confidential Unemployment Compensation (UC) Information to the Department of Labor’s Office of Inspector General for the purpose of investigating UC fraud is mandatory”, December 16, 2016.

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NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.

New York Council of Nonprofits, Albany, NY

It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios. We are impressed with the accuracy of their employment decisions, integrity of their employees and efficiency of their claim handling. We greatly respect and value the consistent, impressive cost savings from the utilization of their outstanding services.


Thresholds, Chicago, IL

Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.

Illinois Network of Charter Schools

Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.

Hugh Parry, Retired President of Prevent Blindness America