LINCOLN - State officials have uncovered more than $156,000 in fraudulent unemployment claims paid to dozens of Nebraska inmates, most of whom were locked up in county jails.
More than 180 inmates illegally collected state jobless benefits from 2013 to 2015 because the Nebraska Department of Labor had no reliable way of determining whether the applicants were incarcerated, Labor Commissioner John Albin said Thursday.
But in recent months, officials have developed a computer program that can routinely cross-check applicants with a database of Nebraska inmates.
Since May, state officials have used the new system to identify those who filed fraudulent claims. They plan to seek felony prosecutions against 25 individuals who received more than $1,500 in benefits, including one inmate who collected $4,300.
"We're hoping word will spread far and wide that the game is over," Albin said. "We will come after you for an overpayment."
As for others who made fraudulent claims, the department has already begun the process of recovering the funds. Those responsible must pay back the money plus a 15 percent penalty.
All recovered money will go back to the unemployment insurance trust fund, which consists of unemployment taxes paid by employers in Nebraska.
"We're going to make every effort to get that money back," he said.
Officials are still sorting through cases to determine the ways inmates cheated the system. In some cases, the inmates employed friends and relatives to file claims for them, but it's also possible that applications were filed directly from jails across the state, Albin said.
Because recent employment is necessary for a jobless claim, prison inmates serving multi-year sentences don't typically defraud the system. That's why county jail inmates - who more typically serve terms of months rather than years - are more likely to have been successful at receiving benefits, Albin said.
Since 2013, the Nebraska Department of Correctional Services has provided the Labor Department with a database of state inmates. Until recently, however, Labor Department staff members have had to manually cross-check the names.
The Nebraska Crime Commission maintains a similar database for county jail inmates. Starting last year, the three agencies began working on a way to share their databases and shut down inmate fraud, Albin said.
"This will do a much better job of protecting the trust fund," he said.
Albin said he could not venture a guess at how much was improperly paid to inmates prior to 2013. He was named interim labor commissioner last year and was kept in the position by Gov. Pete Ricketts.
The state's insurance fraud rate runs at about 1 percent, compared to 2.7 percent nationally, according to the U.S. Department of Labor.
↧