Integrity program uncovers nearly $2 million in unemployment insurance fraud

Inmates face criminal charges, barred from future benefits

[October 11, 2012]  CHICAGO -- More than 1,100 individuals could face criminal charges and must repay nearly $2 million in unemployment insurance benefits wrongfully paid on their behalf while they were in jail or prison, the Illinois Department of Employment Security announced Wednesday.

Cross-matching names of individuals collecting unemployment insurance benefits with inmate lists from Illinois' county jails and state prisons is the latest effort to protect taxpayers, prevent fraud and help the economy, IDES Director Jay Rowell said. Integrity initiatives in the past year have saved $120 million.

"The inmate cross-matching initiative is another important step in rooting out waste, fraud and abuse," Rowell said. "Money that funds the unemployment insurance program comes from businesses. Stopping fraud helps our businesses reduce costs, which leads to new hires and a stronger economy."

Data released Wednesday represents July, August and September, the integrity program's first quarter. Previous months also were examined. The Department of Employment Security will seek repayment and garnish federal and state tax returns if necessary. The department will prohibit individuals from collecting future unemployment insurance benefits as long as the debt is outstanding. The department also will recommend appropriate cases for prosecution.

To be eligible for unemployment insurance, an individual must be available for work. The new inmate cross-matching system identified individuals who were incarcerated and receiving benefits. Measures are in place to prevent benefits from being improperly stripped from someone who was incarcerated but otherwise available for work. It is possible that the incarcerated individual did not know someone continued to certify for benefits on their behalf. All IDES decisions can be appealed.

While the new system stopped some payments before they could be made, the largest single wrongfully collected amount was nearly $43,000 on behalf of one individual in the Cook County Jail. There were 296 Cook County inmates connected to $722,689 in wrongful payments. Other high figures were in Will County with 21 inmates and $85,159; Winnebago, 20 inmates and $84,533; Lake, 20 inmates and $76,017; and Peoria, 21 inmates and $72,350. It is unlikely that jail officials and local leaders could have prevented the wrongful payments.

In the past year since Rowell has been appointed by Gov. Quinn, he has initiated the inmate cross-matching system, started garnishing federal tax returns of unemployment cheats, bolstered the anti-fraud unit with attorneys from Attorney General Lisa Madigan's office and created a new-hire directory to more quickly identify fraud. The programs have saved taxpayers $120 million.

[Text from Illinois Department of Employment Security file received from the Illinois Office of Communication and Information]