Unemployment insurance fraud in California is covered under Insurance Code Section 2101 and Penal Code Section 550. California designed an unemployment insurance program to protect its citizens financially when they lose their jobs without fault. This program provides unemployed workers with financial assistance as they seek new employment opportunities. However, this program is only available to certain unemployed people.
You cannot be eligible for an unemployment insurance program if you are fired, voluntarily quit, or leave your job. You can receive $50 to $450 per week in benefits for one year if you qualify for the unemployment insurance program. Unfortunately, some people often misuse the unemployment insurance program. You could face severe penalties if you are guilty of unemployment insurance fraud. If this happens, you should seek the services of a skilled attorney. The Pasadena Criminal Attorney has a qualified and competent team of attorneys that is ever ready to help you. They will provide you with legal representation and ensure you receive the best possible outcome in your case.
Unemployment Insurance Fraud Explained
The Employment Development Department (EDD) is responsible for administering the unemployment insurance program. This program was initiated in 1935 by the legislature, with employers contributing to the program through workers' deductions. Its purpose was to protect workers when they lost their jobs and before they secured new jobs.
Eligibility For Unemployment Insurance Benefits
For you to qualify for unemployment insurance benefits, the law requires you to be:
- Off a job for the last one and a half years
- Ready to begin working immediately you secure a job
- Physically fit to start working
- Actively looking for another job, or
- You are unemployed
Sometimes, you can qualify for an unemployment insurance program even if you lose your job because of your own fault. When you quit or are fired from your job, some provisions allow you to benefit from this insurance program. The Employment Development Department will establish qualifications for unemployment insurance based on the facts of your case.
The purpose of this program is to protect the unemployed, but some individuals pursue these benefits even if they do not qualify. It can lead to a system backlog for those who are legally eligible if many people misuse the unemployment insurance program. The cost of tax deductions for employers will also increase. Committing fraud is a serious offense that carries severe repercussions.
Factors That Can Lead To Unemployment Insurance Fraud Charges
You could face fraud charges if you:
- Help someone else to secure unemployment insurance benefits unlawfully. This can be achieved by changing or concealing essential facts, providing false information, and using counterfeit identification.
- Access insurance benefits even if you do not qualify
- Deliberately conceal some facts or provide false information to increase the unemployment insurance benefits
- Intentionally provide false information, conceal information, or fake identification documents to receive unemployment insurance benefits.
You and your employer can commit unemployment insurance fraud.
Examples Of Unemployment Insurance Fraud
Unemployment insurance fraud can be committed in many ways, including:
- Providing false information on the reason why you lost your job. You can claim that you were fired not because of poor job performance, but rather due to other reasons.
- Using false information, such as a false name or a social security number, while working and receiving unemployment insurance benefits simultaneously
- Providing misleading information on why you are unemployed. You can claim that you were retrenched rather than being fired for poor performance.
- Creating a fictitious employer and claiming you qualify for unemployment insurance benefits
- If you are not actively pursuing a new job, but claim to be while applying for the unemployment insurance benefits
- Cashing out another person’s benefits without his/her consent
- Pursuing unemployment insurance benefits from another state while staying in California
- Failing to inform the EDD that you are receiving workers’ pension or compensation
- Failing to inform the EDD of your work if you are currently working while receiving unemployment insurance benefits
An employer can face fraud charges if the employer provides EDD with false information regarding workers' wages and their termination. The employer could do this to avoid contributing to the unemployment insurance compensation program. Your employer can also face fraud charges for failing to remit funds to the EDD after deducting them from the workers' wages for UI as required by the law.
How EDD Carries Out Its Investigations
The EDD carries out investigations into all unemployment fraud cases. It will start the investigations upon receiving complaints from the public through the hotline or website, or if the EDDD finds red flags on your UI benefits application form. The red flags can be a forged departmental seal or signature.
The investigators will also begin their investigations into your case if you provide false employment information, such as falsifying your employer information. The agency will contact your employer to verify your information. Sometimes, the investigators will try to establish if you are actively pursuing new employment. They will do this by reaching out to several prospective employers listed on your application form and verifying if you have applied for a job.
If you falsify someone else’s identification documents, the investigators will try to uncover the truth. They will use all available means, like videos and surveillance cameras, to prove that you committed unemployment insurance fraud. The investigators will evaluate the evidence against you if there is reasonable evidence showing that you committed UI fraud.
The investigators will prepare a report and submit their findings to the District Attorney once they have uncovered evidence that you committed UI fraud. They will retain their case until they gather enough evidence, in case they feel the judge might reject their findings.
Penalties For Unemployment Insurance Fraud
You will face penalties for unemployment insurance fraud charges depending on the facts of your case. A conviction for this crime will depend on how the prosecutor files your case. The prosecutor can file your case as a wobbler depending on your case’s facts and your criminal record. You could face penalties for unemployment insurance fraud under the following statutes:
General Insurance Fraud - Penal Code 550
If you are charged with unemployment insurance fraud under Penal Code 550, the fraudulent amount involved will play a significant role in your conviction. You will face misdemeanor charges if the fraudulent amount involved does not exceed $950. Misdemeanor charges can attract the following penalties:
- Misdemeanor probation
- A fine that does not exceed $1000
- A jail term that does not exceed six months in a county jail
Your crime will be charged as a wobbler if the fraudulent amount is $950 or exceeds that amount. If this happens, you will face misdemeanor or felony charges. Misdemeanor charges will attract the following penalties, depending on how the judge charges you:
- A fine that does not exceed $10,000
- Informal probation
- A jail term that does not exceed one year in a state prison
You will face the following penalties if you are charged with a felony:
- A fine that does not exceed $50,000, or pay twice the fraudulently obtained amount
- Felony probation
- A jail term of two to five years in a state prison
Unemployment Insurance - Penal Code 2101
It is a crime under Penal Code 2101 for you to conceal facts, create a false statement, modify, or use a fake identity to receive unemployment insurance benefits. This crime is often charged as a wobbler. If you are charged with a misdemeanor, you will face the following penalties:
- A fine that does not exceed $20,000
- Misdemeanor probation
- A jail term that does not exceed one year in a county jail
On the other hand, you will face the following if you are charged with a felony:
- A fine that does not exceed $20,000
- Felony probation
- A jail term of 16 months or three years in a state prison
Additional Penalties
An unemployment insurance fraud conviction can attract additional sentencing that can have a negative influence on your career. Sometimes, your professional license can be revoked or suspended if your crime is of moral turpitude. Most fraud offenses are categorized as crimes of moral turpitude.
If you are convicted of unemployment insurance fraud, you could be ordered to refund the EDD the amount you obtained and pay a 30% penalty. You will also be unable to access or retain any benefits. If this happens, you should consult an experienced criminal defense attorney. An attorney can guide you on repaying the EDD and can help convince them to drop the criminal charges against you. You will be required to make payments on time if the EDD agrees to have you repay the amount you fraudulently received. The EDD will still file criminal charges against you if you fail to make the payment.
Unemployment Insurance Fraud Legal Defenses
An unemployment insurance fraud conviction can negatively affect your life. With the help of an experienced attorney, you can develop the best defense strategy. Some of the defenses you can present include:
Plea Bargain
Sometimes, the circumstances surrounding your unemployment insurance fraud charges point to your guilt. You might realize that no legal defense strategies are available. At this point, your criminal defense attorney can negotiate with the prosecutor for a plea bargain.
Negotiating a plea bargain is the best option if the prosecutor has unsubstantiated evidence against you, and many UI cases are pending in the judicial system. A plea bargain can also help the office of the District Attorney to secure UI conviction against you. It can also minimize your criminal liability if you are charged with unemployment insurance fraud.
Additionally, a plea bargain can result in the prosecutor filing reduced charges or dropping your criminal charges. However, you will be required to agree to a ‘’no contest’’ or ‘’guilty’’ charge.
You Are A Victim Of Mistaken Identity
Sometimes, the court can convict you of an insurance fraud offense if another person accuses you of the offense. This can happen if someone else files a fraudulent claim and accuses you after discovering that they are about to be caught.
In some situations, you can be an identity theft victim, where another person uses your identity when committing fraud. This defense can be used to prove that you did not commit the offense. You must provide sufficient evidence showing that you did not give the falsified documents.
There Is No Enough Evidence
Sometimes, investigators can rush to file charges against you because of the pressure to prosecute fraud cases. The investigators can easily conclude their investigations, arrest you, and file charges without gathering enough evidence. The prosecutor can accuse you of intentionally engaging in fraudulent activities against the EDD. If this happens, the judge can charge you with unemployment insurance fraud. You should consult a criminal defense attorney if you find yourself in this situation. Your attorney can prove that the evidence against you is not enough for the unemployment insurance fraud charges.
For example, the prosecutor can accuse you of knowingly withholding your employee’s deductions and failing to remit to the EDD if you own a business. This defense can be admissible in court if you prove that you do not personally take care of your business accounts. Your attorney can also prove that you do not handle your workers’ payroll. As a result, the attorney can claim that there is no way you could have deliberately failed to remit your employee’s deductions to the EDD. The judge can reduce or drop your charges if he/she is convinced that there is not enough evidence against you.
You Had No Fraudulent Intent
The prosecutor must show that you knowingly acted fraudulently before the judge convicts you of an unemployment insurance fraud. The court can drop your charges if the prosecutor does not prove that you acted with the intent to defraud the EDD. Your criminal defense attorney can also claim that the documents you submitted while applying for the benefits were legitimate.
Your attorney can also allege that you mistakenly provided false information to the EDD and that you had no intention of defrauding the department. For example, you can write an incorrect social security number or name on the application form.
You can also fail to give the EDD information unknowingly. For example, you can forget to notify the EDD about your freelancing income because you did not know that you were required to inform them. This is not an intentional act to defraud the EDD, and the judge cannot convict you of this offense. This defense can only be admissible if your attorney convinces the court that you had no intent to defraud the EDD.
Related Crimes
In most cases, unemployment insurance fraud can be charged alongside the following offenses:
Perjury - Penal Code 118
The prosecutor must prove the following elements if he/she accuses you of violating Penal Code 118:
- You took an oath to testify truthfully under penalty of perjury
- You knowingly stated that the information you gave was true, even if you were aware that it was false
- The information was material
- You were aware that you were making the statement while under oath
- You intended to testify falsely when you made your false statement
You will be punished under perjury laws if you provide information in any of the following circumstances:
- In a signed certificate
- In a signed declaration
- In a signed affidavit
- When being deposed
- When testifying in court
- In a DL 44 driver’s license application at the DMV
An oath is:
- To affirm the truth of a statement
- An affirmation or any other way allowed under law
The following are examples of perjury:
- Providing false information on a material case in a signed affidavit
- Giving false information regarding a car crash in a deposition for a personal injury case
- Lying regarding the identification of a suspect when testifying in a California criminal proceeding
Violation of Penal Code 118 is often charged as a felony. This offense will attract the following penalties:
- A fine that does not exceed $10,000
- A jail term that does not exceed four years in a state prison
The judge can also grant you felony probation instead of prison time. Fortunately, a conviction under Penal Code 118 will not have any negative immigration repercussions. Crimes involving moral turpitude will result in a deportation order or render the individual inadmissible.
However, a charge of perjury will affect your gun rights. According to California law, people convicted of felonies are not permitted to possess or own guns.
You can only petition the court to have your perjury case expunged if you were awarded probation. However, your case cannot be expunged if you received a prison sentence.
The following are some of the defenses you use to fight your Penal Code 118 charges:
- Not under oath
- No material matter
- No intentional lie
Conspiracy - Penal Code 182
It is a crime under Penal Code 182 for you to agree with someone else to commit an offense, and at least one of you takes an overt act to further that agreement. If the prosecutor accuses you of violating PC 182, he/she must prove the following elements:
- You agreed with someone else to commit an offense.
- You or the other person took an overt act to further the agreement
- At least one of the overt acts was committed in California
You will face felony charges if you conspire to commit a felony. The judge will impose penalties on you for the felony with the most severe sentence if you conspire to commit more than one felony.
On the other hand, conspiracy to commit a misdemeanor is often charged as a wobbler. The judge can charge you with a misdemeanor or a felony. Both misdemeanors and felonies are subject to fines and terms of incarceration. Sometimes, the court can grant you probation.
However, you can face conspiracy charges even if none of your co-conspirators get charged. You will also be charged with both conspiracy and the attempted or completed offense if the offense you conspired to commit is attempted or executed.
You will lose your gun rights permanently if you are convicted of conspiracy as a felony. However, your gun rights will not be affected if you are convicted of a misdemeanor. On the other hand, you will be thrown out of the U.S if you conspire to commit a deportable crime and you are a non-citizen. Most deportable offenses are categorized as aggravated felonies or offenses of moral turpitude.
The defenses you can present against conspiracy charges include:
- You withdrew from the conspiracy
- There was no overt act
- There was no agreement
Possessing a Counterfeit Seal - Penal Code 472
It is a crime under Penal Code 472 for you to forge, counterfeit, or possess a fraudulent public seal. If the prosecutor accuses you of violating PC 472, he/she must prove the following elements:
- You forged the seal of the state, a legally authorized public officer, or a court of record
- You intended to defraud when you did the act
You will face the charges under PC 472 if the following is true:
- You possessed an impression of a public seal
- You were aware the seal was a counterfeit and knowingly concealed that fact
- You acted with the specific intent to defraud someone else
Possession of a counterfeit seal is often charged as a wobbler. The judge can charge you with a misdemeanor or a felony. Misdemeanor charges will attract the following penalties:
- A fine that does not exceed $1000
- A jail term that does not exceed one year in a county jail
On the other hand, a felony charge will attract the following penalties:
- A fine that does not exceed $10,000
- A jail term that does not exceed three years in a state prison
However, you can present the following defenses against PC 472 charges:
- The police violated your rights
- You were entrapped
- You had no intent to defraud
Find a Criminal Defense Attorney Near Me
You can commit unemployment insurance fraud if you knowingly collect benefits based on inaccurate or incorrect information provided when applying for the benefits. Unemployment insurance fraud is a serious offense punishable by law, and you can face different penalties depending on your criminal history and the facts of your case.
Some of the potential consequences of committing fraud include losing your eligibility for similar benefits in the future. Other penalties include fines, prosecution by government agencies, and jail time. If you or your loved one is currently facing charges for unemployment insurance fraud, contact the Pasadena Criminal Attorney. Call us at 626-689-2277 to speak to one of our attorneys.
