Albany, NY (September 17, 2013) -
State Labor Commissioner Peter M. Rivera and Westchester County District Attorney Janet DiFiore announced that Chiara Hudson, 24, of the Bronx, New York was sentenced to incarceration and four and a half years of probation for fraudulently collecting $12,150 in Unemployment Insurance benefits. In addition, she is required to pay back full restitution in the amount of $5,600 to the Tax Department and $12,150 to the Labor Department.
"Any time someone is caught fraudulently collecting benefits, it sends a strong message to other would-be thieves," said Governor Andrew M. Cuomo. "If you steal from the unemployment insurance system, which is tailored to help those legitimately in need, you will be caught and you will pay."
Ms. Hudson pleaded guilty to one count of Grand Larceny in the 3rd Degree and one count of Criminal Tax Fraud in the 4th Degree. Ms. Hudson will begin serving time in prison Friday evening, September 20, 2013.
"Criminals who fraudulently collect unemployment benefits aren't just stealing from the State, they're stealing from those who lost their job and still have to keep a roof over their head and support their families," said Labor Commissioner Peter M. Rivera. "Unemployment Insurance fraud convictions send a message to anyone trying to cheat the system that you face a jail sentence if you steal from the State of New York."
Ms. Hudson, of Baychester Avenue, a tax preparer and owner of Arlanna's Accounting Services, prepared tax returns out of her former home/office in Mount Vernon. In November of 2011, Department of Labor investigators found that the defendant used 16 different identities to attempt to collect Unemployment Insurance benefits. Ms. Hudson also submitted a fraudulent claim under her own name, falsely claiming to have worked for a healthcare company in Westchester County.
The Department of Taxation and Finance joined the investigation and discovered that Ms. Hudson filed fraudulent returns that entitled more than 100 of her clients to illegally overstated refunds totaling more than $100,000. She also stole the identities of additional taxpayers and then used that information to submit false tax returns and have the refunds issued directly to her.
"I commend Commissioner Rivera and District Attorney DiFiore for their successful investigation and prosecution of this case," said Commissioner of Taxation and Finance Thomas H. Mattox. "Consumers trust tax preparers to be honest, ethical and to act in the best interest of taxpayers. We will continue to work with all levels of law enforcement to bring criminals such as this to justice."
"This defendant, in filing false applications for Unemployment Insurance benefits and false tax returns for acquaintances and customers, further cost the State's taxpayers in having to uncover and stop the ongoing frauds as well as ensure that the stolen money will be repaid, all at a time of tight budgets and resources," said District Attorney Janet DiFiore after the defendant's guilty plea.
Employers across the state contribute to New York's Unemployment Insurance Trust Fund. When the Trust Fund is forced to pay out because of a fraudulent claim, employers have to pay more -- and that means consumers will be paying more as well.
In 2012, New York State paid out nearly $7.1 billion in total Unemployment Insurance benefits to 1.13 million people. In addition to administering the Unemployment Insurance system, the Department of Labor is responsible for preventing and stopping fraud.
The Department of Labor's Office of Special Investigations aggressively investigates and roots out Unemployment Insurance fraud. The Office of Special Investigations builds cases and refers them to local district attorneys to prosecute. Between 2010 and 2012, the Department of Labor has recovered nearly $79,000,000 in fraudulent Unemployment Insurance payments and referred more than 2,400 cases to district attorneys and law enforcement agencies, including 770 last year alone. So far in 2013, more than $18 million in restitution has already been paid.
Hudson was sentenced by Acting County Court Judge Helen Blackwood. The case was prosecuted by Assistant District Attorney Nicole Gamble, under the supervision of Investigations Division Chief Ted Livingston and Bureau Chief Gwen Galef of the Economic Crimes Bureau of the Westchester County District Attorney's Office. Anyone with information about Unemployment Insurance fraud should call the Department of Labor's toll-free fraud hotline at (888) 598-2077.