Unemployment-fraud cases double

Associated Press

DAYTON

The number of fraudulent claims for unemployment-insurance benefits and inadvertent overpayments more than doubled in Ohio since the recession began as the number of jobless workers claiming benefits rose.

Ben Johnson, a spokesman for the Ohio Department of Job and Family Services, said the unprecedented rise in the number of jobless workers claiming benefits has meant “more opportunity for fraud,” the Dayton Daily News reports .

Last year, Ohio recovered $9.4 million in overpaid benefits and fraudulent claims from about 50,000 claimants, compared with $7.2 million from about 22,000 claimants in 2007.

“It’s less about the rate of fraud increasing and more about there being more money [and people] in the system,” Johnson said.

In 2011, Ohio paid out about $3.3 billion in unemployment compensation, nearly three times the $1.2 billion distributed in 2007.

More people claiming benefits legitimately has led to more laid-off workers continuing to collect benefits when they no longer qualify or filing false claims that go undetected for months because of the state’s huge caseload.

Fraud has negatively affected the state’s unemployment compensation trust fund, which was forced to borrow money to keep up with payouts and still owes the federal government more than $2 billion.

As other states also struggled with the problem, the federal government passed new legislation this year requiring states to pursue fraudulent claims.

Ohio officials say they already have been doing that. The state last year added employees to its Benefit Payment Control Unit, which mostly relies on tips and cross-checking records to locate fraud and overpayments.

“We have close to 50 ODJFS employees that do nothing but pursue unemployment-compensation fraud,” Johnson said. “So we’re already very aggressive and have reallocated resources to become even more aggressive as the amount of money in the system has grown.”

Salaries of the payment control unit’s 46 staffers are paid by the federal government, which collects a portion of the money they recover that was paid out as federally funded emergency or extended unemployment benefits. State benefits that are reclaimed are put back into the state unemployment compensation fund.

Though the payment control unit’s main goal is to reclaim overpayments, it takes fraud seriously. The unit first tries to work with claimants on the collection of nonfraudulent overpayments, Johnson said.