Prison with benefits: WI
inmates collect $600,000 in unemployment
Wisconsin Reporter – M. D. Kittle – 7/11/2013
MADISON — Who says you
can’t collect unemployment in prison?
The law.
But that didn’t stop
hundreds of inmates from cashing in on hundreds of thousands of dollars in
illegal unemployment payments, according to information obtained by Wisconsin
Reporter through an open records request.
There were 593 cases of
“overpayments,” or jobless benefits paid in the names of Wisconsin
prisoners between July 2012 and this month — to the tune of $616,248,
according to state Department of Workforce Development records.
Crime Pays? 593 inmates
collected a total of $616,000 in unemployment benefits over the last year,
according to the Department of Workforce Development.
That’s more than double the
amount uncovered in an audit in 2011, which found the Unemployment Insurance Division paid
out $291,248 to inmates, according to DWD spokesman John Dipko.
Data
obtained by Wisconsin Reporter in July 2012 found 406 inmates scammed
unemployment benefits from July 2011 to July 2012.
Dipko said the numbers are
rising because of collaboration between agencies in targeting fraud.
“We believe the primary
reason is we are getting better at tracking down cases through our aggressive
approach, stronger relationships with correctional officials, and more
effective use of the tools at our disposal to track down cases,” he said in a
follow-up email to Wisconsin
Reporter.
Dipko added that the latest
numbers also may cover a slightly longer period.
Unemployment compensation
programs are administered by the states and funded by payroll taxes that
employers pay.
The Unemployment Insurance
Division uses an inmate cross match system initiated in 2011 to match records
with Social Security Administration records for incarceration.
“The monthly run helps
identify individuals who were collecting UI (Unemployment Insurance) benefits
while incarcerated,” Dipko said. “While the information obtained via this cross
match is about three months old, it provides the opportunity for recovery of
benefits that were wrongfully claimed.”
Dipko said DWD receives
alerts from officials who become aware of inmates receiving UI benefits. It’s
part of an ongoing approach that includes “actively monitoring” media reports
of criminal activity to determine whether the subjects are filing for
unemployment benefits and, if so, “immediately suspending payments and
investigating.”
But the system isn’t fraud
proof.
Gov. Scott Walker recently
signed into law Act
36, which is supposed to strengthen the Unemployment Insurance Division’s
ability to hold all UI claimants accountable for sharing their PIN information
in fraud cases. Unemployment officials say much of the fraud is committed when
a family member or friend reports an unemployment claim on behalf of the
convict. Pocketing unemployment on behalf of an inmate is a legal no-no.
“Should an inmate share his
or her PIN with a spouse, significant other, mother or other family member or
friend while incarcerated and fraud occurs, we will be able to hold the inmate
responsible for the overpayment,” Dipko said of the new law. “That is a change
from current law and should continue to support our fraud detection and
recovery efforts.”
The Unemployment Insurance
Division also has added 10 investigators, compared to one under Gov. Jim
Doyle’s administration, to “aggressively pursue and recover overpayments and
fraudulent claims,” Dipko said.
With more resources and
sharper teeth in laws devoted to going after unemployment fraud, it begs the
question: Was there more fraud out there that had gone undetected? Is there more
fraud than is being reported? The answer appears to be, probably.
Dipko could not provide
recovery figures for unemployment benefits paid to inmates, but he noted the Unemployment
Insurance Bureau of Tax and Accounting collected more than $25.2 million in
fraudulent overpayments and more than $24.9 million in non-fraud
overpayments (mistakes made by UI or glitches in the system) in 2012.
The UI division attempts to
recover fraud and other overpayments through levies, warrants and tax-refund
intercepts.
There are instances in which
inmates could be eligible for unemployment benefits. Inmates held at county
jails for a short time such as 48-hour holds, or who are permitted to leave
jail and look for work and are considered able and available to work, could legally
be eligible for Unemployment Insurance, if they are unemployed, Dipko said.
State Rep. Samantha Kerkman,
R-Randall, co-chair of the Joint Legislative Audit Committee, said the
increased level of overpayments to inmates underscores the importance of
agencies cross-checking beneficiaries of public assistance programs.
“I think this is a great
start but we can always be more vigilant,” she said, noting proposed legislation
and calls for bills to boost cross-referencing. “This is critical in saving
taxpayers money.”
Contact M.D. Kittle at mkittle@wisconsinreporter.com
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