Tonawanda News

May 2, 2013

State recovers unemployment dollars

Staff reports
The Tonawanda News

Tonawanda News — A state and local partnership aimed at investigating unemployment insurance fraud recovered almost $2 million in stolen funds in 2012, including sums of $132,000 and $135,000 from Erie and Monroe counties, respectively.

Those two are among the top 10 counties in the state to return the largest portions of recovered funds stolen from the state’s unemployment insurance fund, according to statistics provided by the department of labor and cooperating district attorneys statewide.

Leading the pack are Orange and Queens counties downstate, where $178,000 and $153,000 in stolen funds were recouped in 2012, respectively, followed by Monroe County, which is so far the top ranked District Attorney’s Office in securing convictions in unemployment prosecutions.

So far this year, the county has secured $92,081.

“Unemployment insurance fraud drives up costs for honest businesses and jeopardizes the benefits of the workers who rely on this vital safety net,” Gov. Andrew Cuomo said in a prepared statement. 

“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.”

Restitution in such criminal cases is paid back to the labor department before being added to a trust fund set up to help workers who have lost their jobs due to downsizing or other factors.

The funds are in turn used to prevent additional costs from accruing to employers because of the trust fund’s ability to pay benefits, even while the same employers pay into the fund. 

“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,” Cuomo’s statement reads.

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