Governor Andrew Cuomo today announced that $51.2 million in fraudulently-collected unemployment insurance benefits have been returned to New York State's Unemployment Insurance Trust Fund.
The funds were recovered through the Treasury Offset Program (TOP), a state-federal partnership in which federal tax refunds are intercepted to cover delinquent debts. New York State was the first state to use TOP to recover fraudulently-collected unemployment insurance benefits. The program recovered $51.2 million -- the largest amount in the nation -- from more than 50,000 individuals, and the funds will be used to pay benefits to unemployed New Yorkers.
"Once again, New York is at the forefront of efforts to protect taxpayer dollars through preventing and collecting fraudulently-obtained government payments. Every dollar we recover through this program becomes available to eligible unemployed New Yorkers who are most in need of this vital economic safety net," Governor Cuomo said. "We will continue to do everything we can to collect fraudulently-obtained benefits from people who don't deserve them, and who are in fact stealing from their fellow New Yorkers."
New York led the nation in recovery amounts by developing a low cost software tool that allows the state and federal collection systems to work together. This model has been shared with other states looking to participate in the TOP.
David A. Lebryk, Commissioner of Treasury's Financial Management Service, which operates the program, said, "We are very pleased with the ongoing success of our partnership with the State of New York and our joint effort to ensure that taxpayers in New York and throughout the country are well served. Overall, we have collected $149 million for the 14 participating states, including the District of Columbia."
U.S. Senator Kirsten Gillibrand said, "Middle class families across New York are watching every dollar in their budget. They deserve a government that does the same. Recovering these funds will help struggling New Yorkers who've lost their jobs through no fault of their own continue to make ends meet, and put food on the table as we continue working to create new jobs for New Yorkers ready to work."
U.S. Representative Charles Rangel said, "This great victory shows that Governor Cuomo is doing a fantastic job at reining in the corruption and fraud in the system. His efforts are proof that benefits programs can be instituted effectively - and that New York State can and should serve as a model for the rest of the nation when it comes to good governance and transparency."
U.S. Representative Tom Reed said, "We applaud the Governor for rooting out and exposing this egregious fraud which victimizes those struggling without jobs in this challenging economy. We continue to focus on saving taxpayer dollars by identifying waste and fraud at the national level and support the Governor's efforts at the state level."
U.S. Representative Joe Crowley said, "I commend Governor Cuomo and the State of New York for their diligent work in protecting taxpayers' dollars and ensuring unemployment insurance benefits actually go to those who need it. Additionally, strengthening the Unemployment Insurance Trust Fund not only helps recipients, but also employers and small businesses in our state as well. Unemployment insurance benefits are critical to thousands of New Yorkers who are out of work through no fault of their own, and we must ensure that those who need these benefits are the ones receiving them. That's why I'm working from my seat on the House Ways and Means Committee to improve the federal unemployment insurance system to ensure it is solvent and to improve payment accuracy."
Debtors are referred to the program by the State Department of Labor after repeated attempts to collect their debts. They also receive 60 days written notice before their federal tax refund is garnished.
The $51.2 million recovered was returned to the Unemployment Insurance Trust Fund to pay benefits to unemployed New Yorkers while they look for work. Employers across the state contribute to the Unemployment Insurance Trust Fund. New York's aggressive anti-fraud efforts helps ensure that cheaters are held accountable while employer dollars are spent exclusively on New Yorkers who lost their jobs through no fault of their own.
Anyone with information about unemployment insurance fraud should call the Department of Labor's toll-free fraud hotline at (888) 598-2077.