Michigan congressman wants unemployment fraud claims reexamined

May 6, 2016 Issues: Economy

Michigan Congressman Sander Levin on Friday called upon Republican Governor Rick Snyder to review thousands of instances of alleged unemployment insurance fraud that had been identified through what he says is a faulty automated computer system.

Levin, a Democrat, insists that the state's Unemployment Insurance Agency (UIA) was negligent in switching to the system in 2013 and not providing adequate human oversight, resulting in a spike in fraud claims to nearly five times the number of claims that had previously been reported.

In a news conference outside of Snyder's Detroit office, Levin was joined by several jobless workers, who said they were never notified they were suspected of fraud, had not been given enough time to respond or that they could not even reach anyone at the unemployment office to dispute the charges.

"In so many of these cases, they were misaccused and when they tried to respond, in most cases they say they've hit nothing but brick walls," Levin told Reuters on Friday.

Levin's office says that if the state does not re-examine those cases, the federal government could withhold more than $100 million from the state for failing to comply with the Social Security Act.

Snyder's office referred all inquiries to the state's UIA. The agency's spokesman told Reuters it was working with the U.S. Department of Labor which has requested that all 60,000 alleged claims of fraud issued by the system since inception be re-examined.

"Michigan law prohibits the agency from reopening fraud cases that are older than one year, if the agency issued a determination and it was not appealed by the parties," UIA spokesman Ken Silfven told Reuters.

But Silfven also said the UIA has been told to proceed regardless of the current law, that it was working with the federal government and human oversight has been improved while a review process has started.

"Losing a job is a traumatic experience, so we want to do everything we can to make this process go smoothly and make sure that those who deserve UI benefits get them, and those who don't do not get them," he said.

A report from Michigan's auditor general says that in more than 90 percent of the cases that were appealed, the computer system was found to be wrong.

THE ACCUSED

Blanche Jackson, 46, lost her job at a chain discount retailer this year, but is still unable to collect her unemployment insurance because the system flagged a prior claim as being fraudulent and she owes the state $4,000.

Jackson, who has four children and two grandchildren, told Reuters a judge ruled in her favor, but that a month after the fact, the state is still demanding she pay the disputed penalty.

"There needs to be a better system because they're screwing over the hard-working people of Detroit," Jackson said after appearing with Levin.

The state instituted the Michigan Integrated Data Automated System (MIDAS) to identify instances of unemployment claims fraud. Some $57 million has been collected into a fund in penalties and garnished wages between March 2014 and March 2015. In 2012, the fund held just $3 million.

That sum accounts for roughly 27,000 fraudulent insurance claims, roughly five times higher than in previous years.

View the origional story here