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A department investigation revealed that insurance fraud accounted for more than $11 million in benefits payments in August 2022 alone.
The benefits were paid out almost exclusively to those who were already working while also collecting unemployment insurance payments during the COVID-19 pandemic, the governor’s office said.
Hochul said the state plans to go after those who received fraudulent benefits payments and will report any nonpayments to law enforcement.
"At the height of the pandemic, when our state experienced an unprecedented unemployment crisis, these fraudulent unemployment insurance claims took resources away from New Yorkers who needed them most," Hochul said.
"My administration is taking action to step up our investigations of unemployment insurance fraud, hold those who take advantage of the system accountable, and protect this crucial benefit for New Yorkers in need."
The governor’s office credited an upgraded fraud detection system for identifying the payments, saying it allows investigators to better review cases and streamline records requests to employers in order to confirm dates of employment.
If the system detects a fraudulent payment, the recipient is given an opportunity to explain the discrepancy.
If the state determines that the claimant was working while collecting benefits, the labor department will “take steps to ensure that ill-gotten payments are returned,” Hochul’s office said.
Possible remedies include repayment plans, garnishing state and federal tax returns, and referring nonpayment matters to state or federal police.
"When someone files a fraudulent unemployment insurance claim, they are stealing from New Yorkers,” Labor Commissioner Roberta Reardon said.
“The Department remains vigilant and will continue to ensure that these criminals are held accountable. We thank businesses and employers for working with us to uncover fraud."
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