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Governor Bentley Signs Unemployment Fraud Penalty Bill

Press Release

Location: Montgomery, AL

Governor Robert Bentley on Wednesday announced he has signed into law House Bill 72, a measure that increases penalties against those who commit unemployment compensation fraud.

The new law prevents anyone who is determined to have committed unemployment compensation fraud from collecting future benefits. The law also requires repayment of fraudulently obtained funds and clarifies criminal charges related to unemployment compensation fraud.

According to estimates from the Alabama Department of Industrial Relations, more than $15 million in unemployment compensation benefits were fraudulently obtained last year.

"Unemployment benefits must be preserved and protected for people who are actively looking for work," Governor Bentley said. "This legislation sends a clear message to anyone who would defraud the system, and that message is, "Don't do it.' We have a new set of penalties, and we will use these tools to preserve benefits for the people who need them."

House Bill 72 was sponsored by Representative Paul DeMarco of Homewood and was carried in the Senate by Senator Paul Bussman of Cullman.

"Committing fraud to obtain unemployment benefits is a serious crime, and its punishment will soon match the serious offense as these provisions go into effect," Representative DeMarco said. "With its passage, the taxpayers and business owners have been given another layer of protection from fraud, and those who seek to steal taxpayer-funded unemployment benefits will be forced to think twice before breaking this law."

"This strong unemployment fund legislation will protect the unemployment fund, reduce the cost to employers, and punish those who knowingly steal from the system," Senator Bussman said.

House Bill 72 will prevent violators from receiving future unemployment compensation benefits for 52 weeks upon the first offense and for 104 weeks for subsequent offenses. The new law also requires full repayment of benefits obtained fraudulently before any other future benefits can be granted. Under the new law, the criminal penalties are further defined, bringing them in line with the state's statute on theft of property.

* Fraud in amounts of $2500 or greater will be prosecuted as Class "B" felonies.
* Fraud in amounts from $500 to $2499 will be prosecuted as Class "C" felonies.
* Fraud amounts less than $500 will be prosecuted as Class "A" misdemeanors.

Currently, most violators who are prosecuted usually receive a fine and a jail sentence, which is most often suspended pending restitution in the amount of benefits received illegally.

"Until now, there was nothing in the law that stopped someone from defrauding the system one year and then turning around and filing a new claim the next," said Tom Surtees, Director of the Alabama Department of Industrial Relations. "Every dollar that is set aside to help the unemployed should go toward those who truly need the help, not to those who would take advantage of the system. This measure helps give teeth to our existing unemployment compensation fraud law, and will hopefully serve as a greater deterrent."

"I would like to thank everyone involved for helping us work toward a solution to this problem," Governor Bentley said. "This is an issue that needed to be addressed, and they worked tirelessly to ensure the bill's passage."

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