Unemployment fraud is a growing issue in Indiana, affecting both the state’s workforce development and the integrity of its unemployment insurance system. When people dishonestly claim benefits, it puts a strain on the state’s resources and can lead to stricter regulations for everyone.
What is Indiana unemployment fraud?
Unemployment fraud is when someone deliberately lies or hides information to receive Indiana unemployment benefits they’re not actually eligible for. Examples include giving false information during the application process, claiming you’re looking for work when you’re not, or even using someone else’s personal details like their Social Security number without permission. This kind of fraud is also committed by people who are in jail but still file for unemployment.
Examples of unemployment fraud include:
- Filing a claim for someone who is incarcerated
- Saying you are able and available to work, or actively looking for work, when you’re not
- Lying about performing the required work search activities
- Providing false information or withholding information when applying for UI benefits
- Deliberately reporting incorrect or zero wages
- Failing to report all earnings when filing a weekly claim
- Filing a claim under another person’s name, Social Security number, or employment information without their knowledge or consent
Employer unemployment fraud
Employers can also commit unemployment fraud. Examples of employer unemployment fraud include when a company intentionally misrepresents an employee’s wages, or falsely labels an employee as an independent contractor to avoid paying into the unemployment insurance system. Another example of employer fraud is when a business encourages laid-off employees to not file for unemployment benefits while still providing them with under-the-table payments.
How to report Indiana unemployment fraud
There are several ways to report unemployment fraud. The method used for reporting will depend on the type of UI fraud you are reporting.
- If someone is receiving UI benefits and is not reporting their hours of work and earnings: Report fraud here.
- If someone is receiving UI benefits at the same time they were incarcerated: Report fraud here.
- If someone is receiving UI benefits but not reporting that they are being paid in cash for working on the side: Report fraud here.
- If someone is currently working and receiving UI benefits at the same time: Report fraud here.
- Are you an employer? Report fraud here using State Form 640-P: Unemployment Insurance Protest (Employer).
- If your Indiana Unemployment Uplink account was accessed by a third party and payments were diverted to a strange bank account: Fill out State Form 57068 and mail or fax it to the department. The Indiana DWD will immediately investigate.
If you are a victim of identity theft
If someone has used your identity to claim unemployment benefits, complete State Form 57068 and mail it or fax it to the contact information listed on the form. Once the DWD gets your form, they will freeze the account and start looking into the issue. If you have a job, let your HR department know so they can dispute the claim with the Indiana DWD.
You should also file a report with the Indiana State Police by filling out a State Fraud Report and emailing it to [email protected].
To protect your credit, alert the major credit bureaus: TransUnion, Equifax, and Experian.
Consequences of Indiana unemployment fraud
If you commit unemployment fraud in Indiana, you can end up in severe legal trouble, facing fines or even time in jail. You will also have to return the unemployment benefits you received because of the fraud and pay interest on that money.
On top of repaying the benefits and interest, you’ll get hit with extra penalties. The first time, it’s an extra 25% of what you owe. The second time, it jumps to 50%. From the third time on, it’s a full 100% extra, plus interest.
Sometimes mistakes can happen. If you disagree with a DWD decision, you have the right to file an appeal.
What is a money mule?
A money mule is someone who moves stolen money for criminals. This can happen in various ways, but one of the common methods is through unemployment insurance fraud. In these schemes, the mule may help file a fraudulent unemployment claim using someone else’s personal information. They could be doing this knowingly for a cut of the money or might be tricked into it.
Recently, the DOL has launched the “Money Mule Awareness Campaign” to alert residents about this growing practice by criminals.
For example, you might get a call or email from a “relative” asking you to help file an unemployment claim for someone who’s sick. They would give you all the information you need and promise to give you a share of the money. But in reality, you’ve become a money mule in an unemployment fraud scheme.
Indiana’s Department of Workforce Development is fighting this type of fraud by adding security measures to its online UI system. These features aim to make sure that the person filing the claim is who they say they are, making it harder for money mules to operate.
Money Mule Warning Signs
How can you spot the warning signs and avoid becoming a money mule? Be skeptical of anyone who asks you to move money on their behalf. This is especially true if you haven’t met the person and the contact is only online. If a job offer looks too good to be true and involves moving money or goods, that’s a red flag.
Being a money mule is a serious criminal offense, and you can face criminal charges. So stay informed and be cautious. By knowing what to look for, you can protect yourself and others from falling victim to these schemes.