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New York State
Department of Labor

Andrew M. Cuomo, Governor Peter M. Rivera, Commissioner

Labor Department and County Sheriffs Crack Down on Inmates who Attempt to Collect Unemployment Insurance Behind Bars

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Albany, NY (November 16, 2010) -

Image of resume The Department of Labor (DoL) and the New York State Sheriffs’ Association plan to slam the door shut on Unemployment Insurance (UI) fraud in jails, State Labor Commissioner Colleen C. Gardner announced today. As of October 2010, the New York State Sheriffs’ Association will now provide all inmate data from 57 county correctional facilities to DoL every other month. The Labor Department’s fraud investigators will compare this information with our records to make sure that prisoners do not collect benefits while in jail.

"With a record number of New Yorkers relying on unemployment benefits and a record deficit in our UI Trust Fund, we knew we needed to get tougher and smarter on UI fraud," said Commissioner Gardner. "These inmates were not thinking about rehabilitation; they were thinking about creative ways to continue to break the law while behind bars. This ends today."

Last year, thanks in part to an audit by the Office of the State Comptroller, the Labor Department became aware of a disturbing scam – inmates were collecting UI benefits while behind bars. Immediately, DoL began to work with the State Department of Correctional Services (DOCS) to check state prison records more often and stop state prisoners from collecting UI benefits while serving their time. The results were immediate. Since January 2010, DoL found 126 prisoners who had committed UI fraud, amounting to $465,000 in stolen benefits.

The Department of Labor’s Office of Special Investigations then went a step further and sought help gathering data from the 57 county correctional facilities across New York State. The New York State Sheriffs’ Association agreed to partner with DoL on this new venture. In October 2010, the New York State Sheriffs’ Association agreed to provide all inmate data from the 57 county facilities to DoL. The Sheriffs’ Association worked closely with these local jails to validate the data and make it compatible with the Department’s computer systems.

As of November 15, 2010, the new cross-match between DoL and the counties has garnered the following results:

  • 84 Incarcerated claimants caught receiving illegal UI payments.
  • 251 prisoner payments placed on hold for further investigation.
  • $178,000 in fraudulent payments identified.
  • $750,000 payments stopped since April 2010.
  • 284 cases under criminal investigation by the Department.
  • 4 cases referred to District Attorney Offices for prosecution.

By year’s end, $3 million in UI payments will be stopped thanks to this partnership. The Sheriffs’ Association and the Department of Labor agree that these numbers will only increase as coordination continues to improve. We expect to save $10 to $15 million a year for those who deserve the benefits.

Brian Fischer, Commissioner of DOCS said, "The cooperative effort between the Department of Correctional Services and the Department of Labor has worked well to curtail fraudulent activity by offenders in state prisons and we support the expansion of this initiative to county jails."

"This is a perfect example of how data sharing between different government agencies can result in the effective and efficient recovery of state tax dollars," said Sean M. Byrne, acting commissioner of the Division of Criminal Justice Services. "In these difficult times, it is especially important to ensure that government benefits are not squandered and that the honest taxpayers of this state are not cheated. I commend Commissioner Gardner and the New York State Sheriffs’ Association for undertaking this creative and important initiative."

District Attorney Derek P. Champagne, President of the District Attorneys Association of the State of New York said, "These types of crimes are particularly egregious in our current fiscal climate. They are stealing money that should be going to the hard working people of this state.  I applaud Commissioner Gardner and the Sheriffs' Association for their collaborative efforts in putting an end to this practice.  The District Attorneys of this state will work aggressively with our partners in law enforcement to prosecute these types of frauds and bring these criminals to justice."

Anyone with information about UI fraud can call the Department of Labor’s toll-free fraud hotline to make an anonymous report at (888) 598-2077.

For more information about the Labor Department’s fight against UI fraud, please visit http://www.labor.ny.gov/.

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