Unemployment insurance fraud payments given to NY counties

May 1, 2013

Unemployment insurance fraud payments given to NY counties

During the recession, many nonprofit and government organizations were faced with the need to let staff members go to make ends meet financially. As the economy picks up, these entities are regaining their footing, and many are looking to make wiser choices when it comes to paying off costs associated with unemployment requirements, such as fees associated with taxes.

Something these organizations should be aware of is the high prevalence of insurance fraud, which recently proved to be a major problem for several counties in New York.

Last year, the New York Department of Labor worked with the state district attorney's offices to prosecute phony unemployment insurance claims and returned nearly $2 million to the unemployment insurance trust fund.

Counties throughout New York received major unemployment insurance fraud returns this week. Orange County saw the largest amount, as it was given roughly $178,000. Queens County saw the second largest payout, worth almost $153,600, and Monroe County came in third with a little more than $134,700, according to Rochester Business Journal.

Governor Andrew Cuomo called unemployment insurance fraud an necessary cost-driver for honest employers that puts the benefits of legitimate claim-filers at risk.

"Such criminal activity should be prosecuted to the fullest extent of the law, and I applaud our local partners who pursue these cases for their vital help in returning these stolen funds back to the Unemployment Insurance Trust Fund," Cuomo said.

Monroe County District Attorney Sandra Doorley added that these cases often get overlooked in a world where violent crime receives most of the media attention. 

Fraudulent unemployment insurance claims are a major burden on local governments involved. While the New York counties received payment returns, these crimes are time- and resource-consuming for organization leadership.

Working with an insurance provider that can tailor to an entity's specific needs can help nonprofit managers rest easy.

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Working with Marshal Whittey at First Nonprofit has been a great experience. He handles our request as a priority and goes above and beyond to resolve any issues we have in a timely manner. Marshall follows through to the end and ensures our needs are met. He has been a great resource for LSC and our “go to” for any tax questions we may have. With LSC transitioning several facilities into one federal tax identification number, First Nonprofit was able to assist and provide guidance with best practices resolving claims to each entity. Additionally First Nonprofit provided knowledge (information materials) and one on one training to HRS group with best practices to handle claims state adjudicated, fraudulent claims, and appeals. And processing information in the First Nonprofit [unemployment claims] system allows for timely information can be collected.

Lutheran Services Carolinas, Salisbury, NC

My experience with FNP has been wonderful. Unemployment in general is quite confusing and FNP has simplified the process for us. Everyone we have reached out to or worked with has been very helpful and follows up to be sure we understand the information. I am so happy we made the switch to FNP!

Stone Valley Community Charter School, Huntingdon, PA

First Nonprofit smoothed the unemployment perils for our organization during Covid. Without the ability to cap our UI exposure, we would not have been able to weather the storm. The program worked perfectly and we have come out of the pandemic ready to forge on. Thanks FNP!

Jewish Silicon Valley, Los Gatos, CA

My experience with the FNP has been fantastic. The idea of setting funds aside for the unemployment tax liability is a bedrock for nonprofit organizations like mine, namely ASHBA; what is even more advantageous is having the FNP as a custodian of those funds. 100% recommended!

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I would like to comment on my experience with FNP….to date our District has saved $1,000’s of dollars by being enrolled in the First Nonprofit program. My only regret is that we did not know about this method of paying unemployment tax years ago….as I had figured about five years

ago, had we enrolled 15-20 years ago, we could have saved our small school district upwards of $500,000 in payments to IDES. Also we would have had a pretty hefty sum of money in our Reserve Account. Thankfully I attended a workshop hosted by First Nonprofit back in 2015 which got the ball rolling!

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