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Economy & Business

Feds, State Go After Unemployment Fraud

Over $50 million was wrongfully paid out to 9,400 individuals claiming unemployment compensation, and the state's Department of Labor and Industry and federal Department of Treasury are intercepting.

The Treasury Offset Program (TOP) allows the departments to seize the federal income tax refunds of those who claimed unemployment compensation (UC), but did not qualify.

Julia Hearthway, Secretary of Pennsylvania's Department of Labor and Industry, says they sent letters to the individuals wrongfully claiming UC in November.

"[The letters said] that there was a fraud overpayment and that they needed to repay that amount of money," Hearthway said. "They were also told that if they didn't, their federal income tax refund could be attached in order to make those payments."

Hearthway said the most common overpayment occurs when an unemployed individual eventually gets a job, but still files for unemployment compensation. They therefore were receiving jobless benefits and a paycheck.

"We're going after only those individuals who have fraudulently gotten payments," Hearthway said. "These are the people scamming the system, and what they're doing is taking away money that needs to be used for those individuals that truly need it; that are truly unemployed due to no fault of their own."

The TOP has already reclaimed more than $6 million from over 2,000 federal income tax refund interceptions as of March 8th.