MONTGOMERY, AL (WSFA) - State Representative Paul DeMarco (R-Homewood) announced legislation designed to combat the growing problem of unemployment compensation fraud at a news conference on Thursday in the State House.
In the 2011 fiscal year alone, the Alabama Department of Industrial Relations estimates that more than 12,000 individuals fraudulently received unemployment compensation benefits totaling more than $15 million.
"The idea that over $15 million has basically been stolen from hard-working taxpayers, especially during these tough economic times, is just intolerable to me," said Rep. DeMarco. "We have a duty to make sure that those who would defraud the system like this are held accountable for their actions and are deterred from doing it again."
Alabama Department of Industrial Relations (ADIR) Director Tom Surtees joined Rep. DeMarco to discuss how stiffening penalties for defrauding the state unemployment office can prevent this problem and save resources for those truly in need.
"This is a much needed measure that will help give teeth to our unemployment compensation fraud law, and will hopefully serve as a greater deterrent," Surtees said.
Currently, the state prosecutes these individuals and they usually receive a fine and a jail sentence, which is often suspended pending restitution in the amount of benefits received illegally. Rep. DeMarco said his bill will add a 52 week disqualification period for anyone who is found guilty of committing unemployment compensation fraud and will require full repayment of funds obtained illegally.
"The number one way in which we discover fraud is by performing a quarterly comparison of those working in the state against those who are receiving unemployment benefits," Surtees adding that,"If employers properly report their hires within seven days, we are able to detect fraud more quickly. If the employers don't report their hires, it only gives those who would defraud the system more time to do so."