5 Consequences of Committing Unemployment Fraud

Unemployment fraud can be charged if an individual fraudulently files for unemployment benefits. This can occur if the individual misreports previous income, lies on an application, fails to look for a new job or does not report an income source. If you are found guilty of unemployment fraud, you may be subject to civil and criminal punishments.

#1 Repayment of Debts

First thing is first: you cannot keep any money you received through fraudulent unemployment claims. You will have to repay every single penny, even if the money has already been spent. This can result in large debts to the state. A debt to the government, federal, state or local, is a senior type of debt. This means it will take priority over all other debts, and your wages may even be garnished in order to make the payments.

#2 Failure to Collect in the Future

Unemployment fraud does not automatically mean you will not be able to collect unemployment insurance in the future. However, collecting in the future can be made more difficult by committing fraud today. You will be under much more supervision in the future, and you will have to absolutely fulfill the terms of your contract in order to maintain your benefits. Depending on the circumstances surrounding the fraud you commit, you may be entirely disqualified.

#3 Criminal Charges

If the amount you collect is very large or if you have committed fraud more than once, criminal charges are likely. This means you will face actual criminal penalties, including jail time, for the actions you committed. For example, large unemployment scams have been uncovered in the past whereby one or two individuals collected checks under false names and information for a multitude of individuals. This type of action resulted in lengthy prison sentences for the individuals involved in every case.

#4 Criminal Record

When you are convicted of a crime, the punishment sticks with you for a lifetime. It is important to remember that all unemployment fraud is a criminal act, even if you do not face prosecution in a criminal court. This act will go on your record, and you may face other problems in the future. For example, you may be precluded from applying to government jobs. Some private employers also ask about criminal activity on a job application and may refuse your application under these conditions. Fraud is an act of deceit, and employers look unfavorably on deceitfulness.

#5 Inability to Secure Employment

Since it is a challenge to secure a job with a fraud conviction on your record, you may not be able to locate employment. In fact, most "white collar" jobs will be out of your reach if you have a criminal unemployment insurance conviction. Add to this the fact you may be rendered ineligible for unemployment benefits, and the penalties you face will be massive. Simply put, it is not worth risking an unemployment fraud accusation to collect what often amounts to a small sum of money from the government. These benefits are intended for truly needy individuals; if you are not truly needy, it is best to simply secure a new job.



Can you collect unemployment if you are in jail?



You are committing unemployment fraud anytime you use the unemployment insurance system and are not actively looking for work. When you are in jail, you are not eligible for a job, and you are not actively looking for one. As a result, to collect unemployment while in jail would be a crime. The moment you become ineligible for work, your unemployment benefits will be removed. If you have dependents outside of jail who rely on the income, they may need to look into other sources of financing in order to continue receiving financial support while you are ineligible.

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