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Public Statements

Governor Cuomo Announces State-Local Partnership Results in Recovery of $1.9 Million in Stolen Unemployment Insurance Funds in 2012

Press Release

By:
Date:
Location: Albany, NY

Governor Andrew M. Cuomo today announced that partnerships between the New York State Department of Labor (DOL) and various State District Attorneys' Offices to prosecute Unemployment Insurance (UI) fraud cases returned nearly $1.9 million to the UI Trust Fund in 2012.

The Labor Department's Office of Special Investigations investigates fraud against the state's UI Trust Fund. Last year, they referred 771 of their cases for criminal prosecution.

"Unemployment insurance fraud drives up costs for honest businesses and jeopardizes the benefits of the workers who rely on this vital safety net," Governor Cuomo said. "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."

The District Attorney's Offices that returned the most money in 2012 were: Orange County, returning $178,033; Queens County, returning $153,587; and Monroe County, returning $134,724.

Top 10 New York Counties in Monies Recovered
ORANGE $178,033.00
QUEENS $153,587.50
MONROE $134,723.77
ERIE $132,053.43
ALBANY $121,943.66
BRONX $103,368.33
DUTCHESS $99,418.02
SCHENECTADY $87,731.60
ULSTER $82,635.12
ONONDAGA $76,164.79

Labor Commissioner Peter M. Rivera said, "A combination of highly trained investigators, sophisticated computer systems and partnerships with top prosecutors means those who steal benefits they're not entitled to will be caught. These are not victimless crimes and I commend everyone involved in both investigating and prosecuting the individuals."

Orange County District Attorney Francis D. Phillips II said, "The successful prosecution of 42 criminal referrals from the Department of Labor proves that interagency cooperation yields results. I am proud of the work of my Special Investigations Unit, together with investigators from the DOL, which has resulted in more than 30 criminal convictions of people who have stolen money from the taxpayers of both Orange County and New York State.

Queens County District Attorney Richard A. Brown said, "In today's tough economic climate, unemployment insurance benefits are a vital lifeline for many New Yorkers. Those who falsely apply for unemployment benefits cheat legitimately unemployed workers and increase insurance rates paid by employers. Their actions erode a vital workplace protection that was created for the benefit of all workers. I am pleased to work with Governor Cuomo and the Department of Labor in prosecuting those who defraud the state and in recovering these much needed funds."

Monroe County District Attorney Sandra Doorley said, "With violent crime dominating headlines, it's easy to forget that millions of dollars each year are stolen from New York taxpayers in the form of fraudulent insurance claims. One year ago, I created a specialized Economic Crime Bureau to protect taxpayers from this abuse and hold these criminals accountable, and it has been a tremendous success. I believe that I speak for taxpayers across the state when I thank Governor Cuomo for funding the critical programs needed to recover these stolen dollars."

Albany County District Attorney David Soares said, "Individuals who commit workers' compensation fraud make it harder for honest people to get lawful benefits, while increasing costs for legitimate businesses. We will continue to identify these fraudulent practices and aggressively pursue unemployment cases to stop our tax dollars from being exploited. For those of you who are currently collecting benefits you are not entitled to, that knock on your door is forthcoming."

So far this year, Monroe County is the top ranked District Attorney's Office with criminal defendants convicted after prosecution by the Monroe County District Attorney having paid back $92,081.

Prosecutors regularly request that the court order restitution of stolen funds to DOL after a conviction. The stolen benefits are returned to the UI Trust Fund to help workers who have lost their job through no fault of their own. Returning stolen funds also prevents additional costs accruing to employers because of the Trust Fund's ability to pay benefits.

The Trust Fund is funded by employers across New York. When the Fund is forced to pay out because of a fraudulent claim, employers have to pay more -- and that means consumers will be paying more as well.

New York State operates one of the largest UI systems in the country. In 2012, New York State paid out nearly $7.1 billion in total UI benefits to 1.13 million people. At the height of the recession in 2009, the state paid out $9.2 billion in UI payments to 1.2 million people.

Last year, New York State was selected to create a single UI National Integrity Center of Excellence by the United States Department of Labor and United States Office of Management and Budget. New York was awarded $15 million to run this innovation think tank entrusted with improving state UI integrity and fraud prevention efforts and collaboration nationwide. New York is now a laboratory for innovation to identify, develop and/or pilot new strategies and tools to combat improper payment and fraud on a national level.

Anyone with information about UI fraud should call the Department of Labor's toll-free fraud hotline at (888) 598-2077.


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