Dayton Daily News...
Ohio unemployment fraud more than doubles in 5 years  
March 12, 2012 

The number of fraudulent claims for unemployment insurance benefits and inadvertent overpayments has more than doubled since the recession began, according to the latest figures from the state jobs department. 

Ohio last year recovered

$9.4 million in overpaid benefits and fraudulent claims from about 50,000 claimants. In 2007, the state recovered about $7.2 million from about 22,000 claimants. 

The dramatic increase in fraud stems from an unprecedented rise in jobless workers claiming benefits in recent years, said Ben Johnson, an Ohio Department of Job and Family Services spokesman. 

“It’s less about the rate of fraud increasing and more about there being more money (and people) in the system, and, therefore, more opportunity for fraud,’’ Johnson said. 

In 2011, Ohio disbursed about $3.3 billion in unemployment compensation — nearly three times the $1.2 billion distributed in 2007. 

More people claiming benefits legitimately has led to a higher incidence of laid-off workers continuing to collect benefits when they no longer qualify or filing false claims that go undetected for months because of the state’s overwhelming caseload. 

Fraud has become a serious drag on the state’s unemployment compensation trust fund, which was forced to borrow money to keep up with payouts and still owes the federal government more than $2 billion. 

But the problem is not isolated in Ohio. 

The federal government passed new legislation earlier this year requiring states to pursue fraudulent claims. Previously, the crackdown on fraud had been suggested, not required, in legislation extending unemployment insurance benefits. 

Still, the new mandate is not likely to alter unemployment collection and enforcement efforts in Ohio. 

“We have close to 50 ODJFS employees that do nothing but pursue unemployment compensation fraud,’’ Johnson said. “So we’re already very aggressive and have reallocated resources to become even more aggressive as the amount of money in the system has grown.’’ 

The state boosted those efforts last year by adding a handful of employees to its Benefit Payment Control unit, which now has 46 staffers and a payroll of about $3.4 million. The unit relies largely on tipsters and cross-checking records to uncover fraud and overpayments. 

Their salaries are paid by the federal government, which collects a portion of the money they recover that was paid out as federally funded emergency or extended unemployment benefits. Reclaimed state benefits go back into the state unemployment compensation fund. 

The payment control unit’s primary goal is to reclaim overpayments. But they don’t take fraud lightly. 

“In cases of nonfraudulent overpayment, we will work with the claimant first on collection,’’ Johnson said. “If we cannot collect from the claimant ourselves, we send it to the attorney general for collection. But people who have defrauded the unemployment compensation system can and will be prosecuted.’’ 

Statewide, more than 150 people have been successfully prosecuted for unemployment insurance fraud during the past two years. 

Cases in which fraudulent claims totaled $500 or more are considered felony offenses, carrying sentences ranging from six months to five years in prison. 

Another area of disagreement is on restricting collective bargaining rights employees — a high-profile issue supported by Republican governors in Ohio, Wisconsin and Indiana. The Obama administration opposes taking away these rights. 

While some Republican governors support ending tenure protections for teachers, the Obama administration has said tenure should be made more meaningful so that it’s based not just on years of time in the classroom but on proof that students are learning. 

The drive by the governors is accelerated by several factors, including a growing body of evidence that many students simply aren’t learning and that effective teachers can dramatically alter students’ lifetime earnings, as well as the push in this tough fiscal environment to ensure all dollars are spent wisely. The bottom line, said Scott, is that there’s a “direct tie between education and jobs.” 

It’s not just Republican governors turning to education. Among the Democrats, Gov. John Hickenlooper in Colorado recently signed a bill to implement new teacher tenure rules and New York Gov. Andrew Cuomo in recent weeks forged a deal on teacher evaluations. 

Williams said in the ‘90s, there was a push for changes in education by governors, but it dried up. He says Obama gave the “mojo” back to governors. 

Not all Republican governors are pleased with Obama’s education policies. Some, like many Republicans in Congress, view Obama’s efforts on education as federal overreach. Former GOP presidential candidate and Texas Gov. Rick Perry, for example, refused to have his state compete in the Race to the Top competition, saying it “smacks of a federal takeover of public schools.” 

After the president’s speech to governors, in which Obama urged them to invest more state resources in education, South Carolina Republican Gov. Nikki Haley told reporters the meeting was “interesting and somewhat frustrating.” 

“My takeaway was here was a president who was saying we could be doing more on education, and here is a president that said give more money to education, but this is also a president that is not untying any of the strings that come with the federal mandates,” Haley said. 

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