Unemployment Fraud: $3.3. Billion in Fraud Payments


Unemployment fraud: A new study by the St. Louis Federal Reserve shows that out of the $108 billion paid out in unemployment benefits in 2011, $3.3 billion was paid out dishonestly. 

Out of that sum, $2.2 billion was paid to people who were still working.

“It’s likely that with bad economic times, the chances for fraud like this rise,” said Yuzhe Zhang, a professor at Texas A&M University and one of the report’s co-authors, according to NBC. “People are struggling economically. I think the fraud problem is going to get worse.”

Out of the people who were working and getting paid unemployment benefits, 12,000 (14 percent) earned more than $900 a week, while 18,000 (roughly 20 percent) were earning less than $300 a week. At the very high end, one percent of the people collecting unemployment benefits but still working were earning more than $2,400. Because high earners get larger unemployment checks than low earners (each worker collects benefits equal to what they got at their last job), the people who hid large incomes received more than twice as much as those concealing low incomes. 

“This shows we need a better way to monitor this type of payout,” said Amy Gordon, an employment benefits lawyer at McDermott Will & Emery, according to NBC. “We’re not doing a very good job of it.”

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