Governor Bentley Signs Unemployment Fraud Penalty Bill
By: Stephen Crews
Updated: May 9, 2012
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."
