Unemployment Insurance Fraud Laws and Penalties in California
With the rising unemployment rates due to the COVID-19 pandemic and recession, California has recently seen an increase in unemployment insurance fraud. Unemployment insurance is a program that seeks to help those who have lost their jobs due to external circumstances while they look for a new job. When applying for unemployment benefits, you must:
- Have earned enough wages during the base period
- Be totally or partially unemployed
- Be unemployed through no fault of your own
- Be physically able to work
- Be available for work
- Be ready and willing to accept work immediately
While unemployment insurance is a great way to keep people on their feet during a hard time, others may be tempted to take advantage of the system in order to get free money. As such, there are strict laws in place to deal with those who commit fraud.
Unemployment Insurance Fraud Laws
Under California Unemployment Insurance Code Section 2101, unemployment insurance fraud is illegal. In order to convict you of a violation of this section, the prosecution must prove:
- You willfully made a false statement or representation, or knowingly failed to disclose a material fact; OR
- You used a false name, false social security number, or other false identification; AND
- You obtained, increased, reduced, or defeated any benefit or payment, whether for you or for any other person
There are a number of ways that you could be charged with insurance fraud. These include:
- Using a fake identity to obtain unemployment benefits
- Working another job without reporting it while receiving unemployment compensation
- Cashing someone else’s unemployment check without permission
- Not actively seeking a new job or giving false reasons for unemployment
- Obtaining benefits from another state where you do not reside
All of these actions are classified as fraud and punishable under Section 2101.
Unemployment Insurance Fraud Penalties
Fraud allegations are investigated by the California EDD. If they suspect that insurance fraud has been committed, the fraud investigation unit carefully examines the evidence. Then, if they determine that there is sufficient evidence of fraud, they submit the findings to the local District Attorney’s Office in order to file criminal charges.
Unemployment Insurance Code Section 2101
Those who are caught cheating the system and convicted of unemployment insurance fraud face harsh penalties. In California, this crime is a “wobbler,” meaning it can be charged as a felony or a misdemeanor. For a misdemeanor conviction under UIC Section 2101, you may face:
- Up to $20,000 in fines
- Up to 1 year in county jail
For a felony conviction under this code section, you may face:
- Up to $20,000 in fines
- 16 months, 2 years, or 3 years in state prison
Penal Code Section 550
The prosecutor may also decide to charge you under California Penal Code Section 550, which is the general insurance fraud statute in California. Similarly, this crime can be charged as a felony or a misdemeanor depending on how much compensation you received through fraud. A misdemeanor charge where the fraud is less than $950 is punishable by:
- Up to $1,000 in fines
- Up to 6 months in county jail
If the fraud exceeds $950, the penalty for a misdemeanor is:
- Up to $10,000 in fines
- Up to 1 year in county jail
For a felony conviction, the consequences are drastically harsher. These penalties include:
- Up to $50,000 in fines or double the amount of fraud, whichever is greater
- 2, 3, or 5 years in state prison
Contact Wallin & Klarich Today
If you have been accused of unemployment insurance fraud, contact Wallin & Klarich as soon as possible to see how we can help. With 40+ years of experience, Wallin & Klarich is your best choice amongst Southern California criminal defense firms. Our attorneys have helped thousands of clients defend against fraud charges, and we have the skills and resources to help you avoid hefty fines and jail sentences.
With offices in Orange County, Riverside, San Bernardino, Victorville, Torrance, West Covina, Los Angeles, and San Diego, you are sure to find an available and convenient attorney near you.
Discover how our team can assist you. Contact us today, toll-free at (877) 4-NO-JAIL or (877) 466-5245 for a free consultation with a skilled defense attorney.
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