A new state effort to prevent county inmates from collecting unemployment has already saved Pennsylvania an estimated $18 million in improper payments, a Labor Department spokeswoman said.
But state officials, failing to recognize or care about the scope of the problem, were slow to act to address unemployment fraud by county prisoners even though the Labor Department has been working with the state prison system for 15 years to stymie jailbirds trying to collect unemployment.
The Pennsylvania Justice Network approached the Labor Department during the Rendell Administration about developing a similar program to target county prisoners, but the suggestion was originally ignored, said Sara Goulet, press secretary in the Labor Department. The Justice Network, called “JNET” is a secure portal used by police and others in the courts and law enforcement to share data between local, state and federal agencies.
Then, when the Labor Department created an Office of Integrity in 2011 to combat waste and fraud, the staff were not aware that there was an easy way to cross-reference court records with unemployment rolls.
Office of Integrity staff slogged away for months before someone pointed out that they could ask prison staff to use the JNET system to immediately determine if inmates were on the list of people who had filed unemployment claims, Goulet said. At that point, the Labor Department contacted JNET to work together, she said.
A pilot program targeting Philadelphia County began last May before it was expanded to statewide. The effort has prevented 3,000 inmates from collecting unemployment benefits.
The initiative identified 1,089 fraudulent claims in January alone. A county-by-county breakdown of fraudulent claims was not available.Goulet said she had no specific data about where the inmates seeking to perpetrate the unemployment fraud were incarcerated.
State officials put a conservative estimate on the reform of $12 million a year. But based on the state’s calculation including the average length of time a person collects unemployment (18 weeks) and the average benefit ($344 a week), just the claims averted in January saved the state more than $6 million.
Goulet said that the effort not only keeps the cash out of the hands of people who are not supposed to receive it, it frees up Labor Department investigators who would otherwise have had a much harder time verifying that fraudulent payments had been made.
To be eligible for unemployment, a person must be ready to work if a job is available. Those ensconced in a jail cell do not qualify.
Goulet said that the initiative is not intended to target county prisoners who are given short sentences of a day or two. In those cases, inmates would be able to satisfy the penalty ordered by the court and then return to society in time to remain available for work and eligible for unemployment.
The abuse occurs when friends or relatives or other conspirators file unemployment claims on behalf of inmates. With most unemployment benefits now being direct-deposited into bank accounts, the money is more easily accessible than paper checks, which an unemployed person would have to get cashed.
Goulet said there are opportunities for the state to recoup money inappropriately paid in the form of benefits. The method most often used involves garnishing a portion of an individual’s federal tax refund. The Labor Department has used that program to get $9.5 million back in benefits that were paid to people who didn’t qualify for them, she said. Not all of that reclaimed money involved fraud by prisoners, Goulet said.
Finnerty reports from Harrisburg for ommunity Newspaper Holdings Inc.’s Pennsylvania newspapers, including The Meadville Tribune. Follow him on Twitter @cnhipa.