California covers unemployment insurance fraud under penal code 550 and insurance code 2101. Ideally, unemployment insurance (UI) is a program designed to cushion people financially when they lose their employment without fault.
This insurance program provides unemployed employees with financial relief as they search for new employment. However, this insurance program is only readily available to some unemployed individuals. For example, if you are fired or voluntarily quit or leave your job, you will not qualify for the unemployment insurance program.
If you qualify or are eligible for the unemployment insurance program, you will receive benefits ranging from $50 to $450 weekly for a period that does not exceed one year. Due to this, the unemployment insurance program tends to be misused by various people.
Facing fraud is a criminal offense carrying harsh penalties. Therefore, if you or your loved one end up facing these charges, you should seek the services of experienced criminal defense attorneys. At Los Angeles Criminal Attorney, our team of qualified and experienced lawyers will guide you, provide the best legal representation and ensure you obtain the best outcome in your case.
Understanding What Unemployment Insurance (UI) Fraud Is
UI is a program run by the Employment Development Department (EDD) in California. The law established this insurance program in 1935, with employers contributing to the program from employee deductions to cushion employees when they lose their job and before they can find new ones.
Criteria for the Eligibility to receive UI benefits
For eligibility for these insurance benefits, the law requires you to be:
- Actively searching for new work.
- Physically fit to start working.
- Ready to start working as soon as you find a job.
- In employment in the last 1 and 1/2 years.
Sometimes, you may be eligible for an unemployment insurance program even when you lost your job due to your fault. Some provisions allow you to benefit from this insurance program when you are fired or quit.
The Employment Development Department determines Eligibility for unemployment insurance depending on the circumstances surrounding your case. Although UI intends to cushion the unemployed, people tend to claim these benefits even when they are not eligible.
When most people misuse the unemployment insurance program, it can result in a system backlog for the legally eligible to receive the UI benefits and increases the cost of tax deductions on the employers. Facing UI fraud, therefore, becomes a severe offense that could end up doing you more harm than good.
Circumstances Leading To UI Fraud
You will be guilty of committing unemployment insurance fraud when you:
- Willfully present false information, fake identification document, or concealed information to receive UI benefits.
- When you intentionally provide false information or conceal some facts to increase the UI benefits.
- Receive the insurance benefits, and you are not eligible to receive them.
- Assist another person in obtaining UI benefits. You can achieve this by providing fake identification, false information, and altering or concealing crucial facts.
You should note that the employer and the employee could be guilty of committing unemployment insurance fraud.
Examples of Unemployment Insurance Fraud
Unemployment insurance fraud covers a wide range of, and some of the examples of this crime include the following:
- If you are currently working while receiving unemployment insurance benefits and fail to notify the EDD of your work
- If you do not notify the EDD that you are receiving workers' compensation or pension
- If you use false identification documents to receive and collect unemployment insurance benefits
- If you try to receive unemployment insurance benefits from another state while residing in California
- When you cash out another person's unemployment insurance benefits without their permission
- If you are not actively searching for employment, although you claim to be while applying for the UI benefits.
- If you create a fictitious employer and list yourself as eligible for unemployment insurance benefits
- If you falsely provide information on the reason for your unemployment. For example, say you were laid off instead of being fired for poor job performance.
- Using false information like false social security or name while working and receiving UI benefits simultaneously.
- Giving false information on the reason why you list your job. For example, saying you were laid off instead of being fired due to poor job performance.
As an employer, you could face unemployment insurance fraud charges when you provide EDD with false information about employee wages and their termination to avoid contributing to the UI compensation program.
Additionally, you could face unemployment insurance fraud charges if you fail to send funds to the EDD after deducting them from the pay for UI as required by the law.
The EDD Investigative Process
In California, the EDD conducts investigations against all unemployment insurance fraud cases. The EDD investigators may start the investigations when they receive tips from members of the public via their website or hotline or if they find red flags on your UI benefits application form. These red flags could either be a forged signature or a departmental seal.
The EDD officers may start an investigation against your claim when they realize you provided false employment information, like falsifying your employer information. They can do this by contacting your employer to verify your information. At other times, the EDD investigative officers will try to find out if you are actively and seriously searching for new employment. They will achieve this by contacting the list of your potential employers listed on your application form and verifying whether you have applied for the job.
If you falsify another person's identification documents, the EDD investigative officers will aim to uncover the truth. The investigating team will use all means necessary, like surveillance cameras and videos, to prove that you have committed unemployment insurance (UI)fraud.
If there is a reasonable belief that you have committed an unemployment insurance (UI) fraud, the EDD investigators will examine and review the evidence against you and find out if you have committed an unemployment insurance fraud.
If the EDD investigators uncover evidence that you committed UI fraud, then they will make a report and file their findings with the DA, who will, in turn, file UI fraud criminal charges against you. However, if the EDD investigators believe that the prosecution could reject their findings. In that case, they may choose to retain their case until they have sufficient evidence to use against you in court.
Penalties for Unemployment Insurance Fraud
Regarding UI fraud, your sentencing will depend on your case's circumstances. A conviction for these offenses will depend on how the prosecution files your charges. The prosecution could file your Unemployment insurance (UI) fraud as a wobbler offense depending on your criminal history and the facts surrounding your case. Therefore, you could end up facing either a misdemeanor or felony charge.
The law can convict you of UI fraud in California under two codes. These codes include the following:
Unemployment Insurance Code 2101
Under this section, it is an offense to conceal facts, create a false statement, alter, or use a fake identity to receive unemployment insurance benefits. The prosecution charges this offense as a wobbler. Therefore, your sentencing court results in the following:
If the court convicts you for a misdemeanor offense, it can convict you to a sentence that does not exceed one year in county jail, informal probation, or a fine that does not exceed $20,000.
When the court convicts you of a felony offense, your sentencing will result in state prison imprisonment ranging from 16 months and can go up to three years. The court could also fine you a sum not exceeding $20,000 or felony probation.
General Insurance Fraud PC 550
California deals with insurance fraud under PC 550. When you face charges under this penal code, the prosecution will file criminal charges against you, where the fraudulent amount will play a crucial part in your conviction.
When the prosecution files insurance fraud charges against you for an amount that does not exceed $ 950, you will receive a misdemeanor conviction with your sentence resulting in
- Six months of county jail imprisonment.
- Fines not exceeding $1,000.
- Informal probation.
However, if the amount in question is or exceeds $950, the offense becomes a wobbler. The prosecution can then file misdemeanor or felony charges against you.
Depending on how the prosecution charges you, a misdemeanor conviction will result in the following:
- One-year imprisonment.
- Informal probation.
- The court could fine you an amount that does not exceed $10,000.
If the prosecution files felony charges against you for an amount exceeding $950, your conviction will result in the following:
- Imprisonment ranges from two to five years.
- Formal probation.
- $50,000 in fines, or pay double the fraudulent amount, whichever is higher.
You should note that a UI fraud conviction could lead to additional sentencing, which could negatively impact your career. Sometimes, the law may suspend or revoke your professional license, considering this crime a moral turpitude offense. In California, all fraud-related cases fall under the crime of moral turpitude category.
Additionally, your UI fraud conviction will require you to pay the EDD the amount you fraudulently obtained and simultaneously pay a 30% penalty. You will also be ineligible to obtain and retain any benefits.
You should seek the assistance of an experienced criminal defense lawyer to help you with a fraud case. Sometimes your attorneys may advise you to pay back the EDD and negotiate with the department so that it does not file criminal charges against you.
If the EDD agrees to have you repay the amount you fraudulently acquired, you will have to make payments on time, and if you default, then the department could still file criminal charges against you.
Best Legal Defenses Against Unemployment Insurance Fraud
Facing unemployment insurance (UI) fraud charges is a severe offense that could negatively affect your life. You will therefore need to come up with the best defense strategy that is tailor-made to suit your case to ensure the best possible outcome in your case.
Fortunately, there are several defenses that our lawyers could develop and use to best suit your case. Every unemployment insurance fraud case has unique characteristics, and our defense team will develop a unique defense strategy to ensure the best possible outcome. Some of the defenses we can use include and are not limited to the following:
Your Intention Was Not Fraudulent
Before the court convicts you of an unemployment insurance fraud case, the prosecution must prove that you intentionally acted fraudulently. If the prosecution can not prove that you willfully acted with the intent to defraud the EDD, then the court can not find you guilty of the offense.
Your defense team can successfully argue that you reasonably believed in the legitimacy of the documents you submitted while applying for an unemployment insurance (UI) benefit. Also, your lawyers could say that you accidentally submitted incorrect information to the EDD, and it was a mistake where you had no intention of defrauding the department. For example, if you write an incorrect name or social security number on the application form.
At other times, you may not provide the department with information unknowingly. For example, if you fail to report to the department about your freelancing income since you were not aware that you needed to report on this type of income. In this case, you did not willfully act to defraud the EDD.
Therefore, the law should not hold you liable for violating UI fraud laws.
Regarding this type of defense, your attorney will aim at casting enough doubts regarding your intent to defraud the EDD. If the jury finds reasonable doubt about your intent, there is a high possibility of avoiding an unemployment insurance fraud conviction in California.
In recent years, UI fraud has been rising in California, and the investigation of fraud cases is also rising. The state of California, aiming to curb these crimes, has put pressure on the investigating bodies.
This pressure could result in investigators rushing to file charges against former employees and employers for UI fraud.
Sometimes, the investigators may easily conclude, arresting someone and filing UI charges without sufficient evidence. If this is your case, you may face unemployment insurance fraud charges where the prosecution accuses you of knowingly engaging in fraudulent activities against the EDD. This is why it is crucial to contact a criminal defense attorney while facing unemployment insurance (UI) fraud charges.
Your defense team should prove to the court that the evidence against you is insufficient for UI fraud charges. For example, if you own a business, the prosecution charges you for knowingly withholding employee deductions and failing to submit them to the EDD. You can use this defense strategy where your attorneys can show the court that you do not personally take care of your business accounts.
Your lawyers can prove to the court that you do not handle employees' payroll, and therefore there is no way you could have knowingly withheld paying the EDD the employee's deductions. The court should acquit you of these charges based on insufficient evidence.
Mistaken Identity or False Accusation
Sometimes, you may face insurance fraud charges when someone from your office frames you for the crime. This can be the case if someone files a fraudulent insurance claim and blames you when they realize they are about to be busted.
Sometimes you may be an identity theft victim, where someone uses your identity while committing unemployment insurance fraud. You can use the mistaken identity defense to prove your innocence in court. In this case, you must prove your innocence to the court and show that you did not submit the falsified documents.
The facts surrounding your unemployment insurance fraud case sometimes point to your guilt. You may find that there are no legal defense strategies available. Your attorney may negotiate with the prosecution for a plea bargain.
Negotiating a plea bargain will be helpful in situations where the prosecution has weak evidence against you, and there are too many UI cases pending in the judicial system.
A plea bargain will allow the District Attorney's office to obtain an unemployment insurance conviction against you. Additionally, it will help minimize your criminal liability when facing unemployment insurance (UI) fraud charges.
A plea bargain will ensure that the prosecution agrees to file a reduced or entirely dismissed a criminal charge against you. In exchange for this, you will agree to a "no contest" or "guilty" charge.
In most cases, unemployment insurance (UI) fraud involves perjury, forgery, and theft allegations. Therefore, the prosecution will file other related offenses charges to go hand in hand with unemployment insurance fraud.
Forgery Penal Code 470
The law under California PC 470 prohibits knowingly creating, altering, or using a written document to commit fraud. Therefore, if you face unemployment insurance fraud charges due to falsifying or altering your identification documents by assuming another person's identity or creating a fictitious employer, the prosecution could also file forgery charges to accompany the UI charges.
California treats the crime of forgery as a wobbler offense. If the prosecution files misdemeanor charges against you, a conviction will lead to the following:
- Misdemeanor probation.
- $1,000 in fines.
- One year of county jail imprisonment.
On the other hand, a felony conviction will attract harsher sentencing, such as
- Formal probation.
- $10,000 in fines.
- Three years imprisonment.
Possession of Counterfeit Seal Penal Code 472
Penal code 472 is the law that prohibits counterfeiting, possessing, or forging a public seal. This is a wobbler offense, and a conviction could result in three years imprisonment or a fine not exceeding $10,000.
Grand Theft California PC487
Under California PC 487, California makes it illegal to unlawfully take another person's property valued at over $950. Under the law, property includes private land, money, or labor.
What this means for your case is that when you fraudulently receive unemployment insurance (UI) benefits exceeding $950, the prosecution could file grand theft charges against you.
A conviction for grand theft will result in the court sentencing you to three years imprisonment or fining you $ 10,000.
Perjury California PC 118
Perjury is a felony offense under California PC 118. You will face these charges when giving false information under oath when you swear to give nothing but the truth.
You will also face perjury charges when you knowingly and willfully sign a document containing false information.
If the law convicts you of this crime, you face four years imprisonment, probation, community service, or the court could fine you $10,000.
Conspiracy California Penal Code 182
Under Penal Code 182, California makes it illegal to conspire to commit a crime. Conspiracy is a felony offense that could accompany an unemployment insurance fraud case. You will face these charges when you agree with another person to commit an offense.
Examples of conspiracy offenses include
- If you agree to falsify documents to obtain unemployment insurance benefits.
- If you deny or block a legitimate person from obtaining unemployment insurance benefits.
A conspiracy conviction will depend on the nature of your offense. For example, if the court convicts you of conspiracy to commit unemployment insurance fraud or any other fraud. In that case, your sentencing will result in one-year imprisonment, with the court fining you $10,000.
If the court convicts you of conspiracy to commit identity theft, it could fine you an amount not exceeding $25,000, formal probation, or face imprisonment that goes up to five years in jail.
You should note that the law will convict you for conspiracy charges even if you never committed the crime you were conspiring to commit.
Contact An Experienced Los Angeles Criminal Defense Attorney Near Me
If you face unemployment insurance (UI) fraud charges in Los Angeles under California PC 550 or insurance code 2101. In that case, you will need to seek the assistance of an experienced criminal defense attorney as soon as possible.
After your arrest for violating insurance code 2101 and penal code 550, you should remain silent and contact your lawyers. At Los Angeles Criminal Attorney, our seasoned legal team will review your case, advise you, and develop a defense strategy to have the prosecution dismiss or reduce your charges. If you have any questions regarding unemployment insurance (UI) fraud charges, do not hesitate to call us at 424-333-0943, and our able team will answer you accordingly.