Unemployment Insurance Fraud

The authorities in California discovered many employers and employees were involved in defrauding the Employment Development Department (EDD). So, the state prohibits failing to submit employees' deductions to EDD and filing false unemployment claims.

Unemployment insurance fraud attracts various forms of punishment based on your criminal record and the amount of money involved in the fraudulent acts. The crime is a enough so that the prosecutor can file a felony or misdemeanor charge. When you or your relative faces the UI charge, ensure you seek legal help from a criminal attorney immediately.

At Darwish Law, our team of experienced and qualified criminal defense attorneys guides you, represents you in court, and helps you build a strong defense strategy to fight the charge. We have helped numerous suspects facing similar charges in Santa Ana have their charges dismissed or reduced. Contact us as soon as you face the charges.

An Overview of Unemployment Insurance Fraud (UI) in California

In California, unemployment insurance is controlled by the Employment Development Department (EDD). The program was established in 1935, and employers contribute to it from employees’ salaries to cushion them if they lose their current jobs before finding new ones. For you to qualify for the UI benefits, you must be:

  • Actively seeking a new job.
  • Unemployed.
  • Physically strong to begin working.
  • Ready to start your job as soon as you find it.
  • Unemployed in the last 18 months.

Sometimes, you qualify for the UI even when you lose the job because of your fault. However, specific provisions only allow you to benefit from the program when you are fired or quit. The EDD considers the facts surrounding your case to determine your eligibility. Although UI benefits focus on cushioning the unemployed, many people claim them even when they are ineligible.

When many people misuse the UI program, it results in a system backlog for those who are lawfully eligible to obtain the benefits. So, unemployment insurance fraud is a severe crime that can have severe consequences for your life. You want to seek legal assistance from your attorney to learn more about the UI.

Various Forms of Unemployment Insurance Fraud in California

Do you know that you can commit unemployment insurance fraud in many forms? According to California law, the following are the primary forms of unemployment insurance fraud:

  1. Employee Violations

An employee can commit unemployment insurance fraud in the following ways:

  • Receiving benefits from different states at the same time.
  • Failing to look for a job and failing to submit a job application to employers.
  • Using unreliable information to obtain unemployment benefits.
  • Receiving other people's insurance checks without their consent.
  • Failing to expose your other sources of income like pensions, workers' compensation payments, and social security benefits.
  • Receiving unemployment insurance benefits while working and failing to report the matter to EDD.
  • Telling lies about why the employee lost their job.
  1. Employers Violations

If you are an employer, you commit unemployment insurance fraud when you do any of the following:

  • You lie about the time or wages of your former employee purposely to increase their insurance benefits.
  • You intentionally fail to make the legal unemployment insurance deductions from your employee's check.
  • Lying about why your employee is not working.

How the EDD Investigates California's Unemployment Insurance Fraud

The EDD is mandated under California law to perform exhaustive investigations into every claim for unemployment insurance. The Employment Development Department launches its investigations right away and receives information from the public via its hotline or websites. Additionally, if the department suspects your application for UI benefits, they may begin an investigation.

A fake departmental seal or signature can be another reason the department begins its investigations. When the EDD officials discover you provided fraudulent employment information, they could begin their investigations. They can ask for information about your employment and verify it by contacting your company.

Other times, the EDD authorities will research to determine how serious you are about looking for a new job. They will do this by contacting the potential employers you indicated on the application form to inquire about your application status. The EDD officers will also investigate the possibility that you fabricated someone else's identification information.

The authorities will use tools like cameras and surveillance footage to show you committed fraud. The EDD officers will examine the evidence against you if they determine that you committed UI fraud. Additionally, they will submit a report to the district attorney, who will then bring a criminal prosecution against you. Instead, if the EDD officers think the DA would dismiss the case, they keep it and accumulate enough proof.

What Are the Penalties in California for Unemployment Insurance Fraud?

Depending on the specifics of your case, you may receive a different punishment or sentence for fraudulently obtaining unemployment benefits. A conviction may result depending on how the defense team presents the evidence. Depending on the circumstances of the case and your criminal history, the prosecutor may decide to file the claim as a wobbler. It implies that you could be charged with a felony or a misdemeanor. According to two different statutes, which are covered below:

  1. Unemployment Insurance - Penal Code 2101

This statute makes it illegal to lie, withhold information, or otherwise misrepresent something to receive unemployment insurance payments. The prosecutor has the option of filing a felony or misdemeanor charge. You are jailed for one year if the crime is a misdemeanor. Additionally, you are placed on an informal probationary period.

Alternatively, if the prosecution decides to file a felony charge against you, you may spend up to 36 months in jail. Additionally, the judge could sentence you to a formal probationary period.

  1. General Insurance Fraud in California - Penal Code 550

The prosecutor may bring criminal charges against you if you are found guilty of violating this statute. The amount involved in the fraudulent activity will be crucial to whether you are found guilty. The crime could be more stable. So, the prosecution has the option of bringing felony or misdemeanor charges.

Penalties for Misdemeanors

You could be charged with a misdemeanor if the prosecution files a fraud allegation involving less than $950. The misdemeanor charge has the following penalties:

  • A probation.
  • A six-month prison sentence.

The law deems a crime a wobbler when the sum involved exceeds $950. Therefore, the prosecution can bring a felony or misdemeanor case. The following punishments result from a misdemeanor charge, depending on the nature of the crime:

  • A probation.
  • 12 months in prison.

Felony Penalties

When you a felony charge, you face the following penalties:

  • Formal probation.
  • Jail term between two and five years.

Additional Penalties

You want to know that unemployment insurance fraud can attract additional sentences. The other penalties could hurt your career. For example, the law could revoke or suspend your license considering the offense as moral turpitude.

Also, the conviction requires you to pay the EDD amount you obtained and a 30% penalty. Also, the law will make you ineligible to retain or receive any insurance benefits. That is why you want to seek legal help from your criminal defense attorney. The attorney will help you understand the case more and help you find the best available alternative.

Again, your attorney can negotiate with the EDD to ensure they do not file the charge against you. When this is the case, the EDD can agree you pay the fraudulently acquired amounts. Ensure you pay the amount in time. When you default the payments, the EDD can proceed to file criminal charges against you.

The Legal Defenses for Unemployment Insurance Fraud

Facing a UI charge can negatively affect your life. But do you know you can fight a UI charge? However, for the success of your case, you must work closely with a competent criminal defense attorney. Your attorney will listen to your case and develop a solid defense to fight the charge. The following are the potential defenses your criminal defense attorney can use to fight the UI charge:

  • No Intent to Defraud

Before you face conviction for committing unemployment fraud in California, the prosecutor must prove you intend to defraud. So, when the prosecutor fails to prove you acted fraudulently, the criminal court will not find you guilty.

Your lawyer can argue that you strongly believed the information you submitted while applying for the UI benefits was legit. Again, your criminal defense attorney can say you accidentally submitted the wrong information. For example, you can argue you incorrectly wrote your name on the application forms.

Therefore, your criminal defense attorney will focus on casting any doubt regarding your intent to commit the fraud. If the court finds that you did not intend to defraud, the judge may drop the charge or reduce it to another less severe charge.

  • False Allegation or Mistaken Identity

Do you know another person who can falsely accuse you of committing unemployment insurance fraud in California? In many cases, false allegations occur due to jealousy or as a way of revenge.

Alternatively, you might be a victim of mistaken identity when another person uses your personal identification details to commit fraudulent acts. Therefore, you can use the defense of mistaken identity to prove your innocence. Remember, you must provide supporting evidence to prove your innocence.

  • Insufficient Evidence

In the past years, unemployment fraud has been rising. Also, the investigations for fraud crimes are increasing. The state of California is putting a lot of pressure on the investigation bodies to help curb the UI fraud acts. The pressure put on the investigation bodies can result in the investigators filing the charges quickly.

Sometimes, the investigators can conclude that you committed the fraud crime without collecting sufficient evidence. When this is your case, the prosecutor may rush to file an EDD charge against you. So, it would be best to work with an experienced criminal defense attorney when charged with a UI charge.

Your criminal defense attorney can challenge the prosecutors' evidence by arguing their evidence is insufficient. For example, you own a firm, and the prosecutor charges you for withholding your employees' deductions and failing to submit them to the EDD.

You might argue that you do not control your business accounts in this case. You can present evidence to show you do not process your employees' payroll, so there is no way you could withhold the deductions.

  • Plea Bargain

Your case's facts can sometimes point you guilty of committing UI fraud. You might need help to use any defense strategy to fight the charges. Your criminal defense attorney can negotiate a plea deal when this is your case. Negotiating a plea deal is a good option, especially when the prosecution team has weak evidence. Also, the plea bargain will help minimize your criminal liability if you face a UI fraud charge.

What Crimes are Charged Alongside Unemployment Insurance Fraud in California?

Since Unemployment insurance fraud involves forgery, theft, and perjury, the court might file additional charges to the UI fraud charge. The crimes charged alongside UI include the following:

  1. Perjury - California PC 118

The crime of perjury is outlined under California PC 118. Perjury involves a person providing false testimony when under oath. You commit perjury when you do any of the following:

  • Give incorrect information in a signed affidavit.
  • Give incorrect information while filing a personal injury lawsuit in a car accident.

Before you face conviction for a perjury case in California, the prosecutor must prove the elements of the crime. When the prosecutor fails to do so, you cannot face conviction. The following are the main elements your prosecutor must prove:

  • You had the intent to present false testimony when making the statement.
  • You knew that you were making a false statement while under oath.
  • The alleged information was material.
  • You willfully testified that the information you presented was accurate when you knew it was false.

According to California laws, perjury is a felony offense. The crime attracts a maximum of four years in jail. Also, the conviction can hurt your right to own or purchase a gun. Remember, California law prohibits you from possessing a firearm when convicted of a felony charge.

  1. Forgery - California PC 470

According to the statute, you commit forgery when you change a signature with the intent to commit fraudulent acts. Usually, forgery involves:

  • Signing against another person's name.
  • Faking another person's handwriting.
  • Forging documents like checks, bonds, and money orders.

The crime is a wobbler. So, the prosecutor can file the charge as either a misdemeanor or a felony. When charged with a felony, you serve formal probation and a 36 months jail term. When accused of a misdemeanor charge, you serve a jail term for up to 12 months and summary probation.

You still have the opportunity to fight the charge. You can win the case with the legal help of a competent criminal defense attorney. The attorney can employ defense strategies like forced confession, false accusations, and no intent to defraud.

  1. Conspiracy - California PC 182

According to the statute, conspiring to commit an offense is unlawful. Conspiracy is a felony crime and could be charged alongside UI fraud. You face the charges when you agree with another person to commit an offense.

The conviction for conspiracy depends on the circumstance of the case. For example, the court can convict you of conspiracy to commit UI fraud. When this is your case, you remain behind bars for twelve months.

When the court convicts you with conspiracy to commit theft, you serve formal probation and remain behind bars for up to sixty months. Remember, you will face the charges even when you never committed the crime you conspired to commit.

  1. Grand theft - California PC 487

According to the law, grand theft involves stealing another person's property, provided the property is valued above $950.

Grand Theft Through Larceny

According to California laws, you commit larceny when you take another person's tangible property without their consent. When controlling the property, you deny the owners from taking value or share of it.

Grand theft by Pretense

According to California penal code 532, you Commit grand theft when:

  • You mislead another person when you tell them false information with full knowledge
  • You use tricks to allow victims to allow you to carry their property

As per California laws, grand theft is a wobbler offense. So, you can face either misdemeanor or felony charges. To convict you, the prosecutor will consider the nature of the crime and your past criminal record.

The potential penalties for a misdemeanor grand theft include a jail term of up to 12 months. When convicted of a felony grand theft charge, you remain behind bars for either 16 months, 24 months, or 36 months.

Contact a Criminal Defense Attorney Near Me

Unemployment insurance fraud can affect both the employee and the employer. When found guilty of the crime, you may compromise your professional and personal reputation in addition to an extensive jail term. So, you must seek legal help from a skilled criminal defense attorney when you or your family member face unemployment insurance fraud charges.

At Darwish Law, our attorneys are skilled and experienced in handling complicated unemployment insurance cases. We are ready to work with you if you seek legal help in Santa Ana. Contact us today at 714-887-4810 for a free case evaluation.