DETROIT, MI — Detroit Public Schools suspended 18 employees and identified 14 former employees involved in unemployment benefit fraud as a result of an investigation completed this week by the district’s Office of Inspector General, according to a statement from the district.
The suspensions are immediate pending a disciplinary hearing, the district said. The individuals involved had no particular connection and worked in 14 different school buildings and several administrative offices throughout DPS, said Steven Wasko, chief communications officer for the district.
http://liarcatchers.com/insurance_fraud.html
The fraudulent unemployment claims covered varying periods of time for each individual between the years of 2008-2012, in some cases for individual employees covering all four years, the district said.
Individual fraudulent claims ranged from $31,000 to $1,900. Affected staff held positions including director, auditor, teacher, ed tech, school services assistant, and noon hour aide.
The active DPS employees received a total of $322,530 in fraudulent unemployment benefits payments, according to the district. A search identified an additional 14 former employees involved in fraudulent unemployment claims. Including those, the total funds involved in this fraud was $470,464, the district said.
DPS said it uncovered the fraud after a thirteen-month investigation that began with a tip in April 2011. Wasko said the investigation has rooted out the fraud.
“We are confident that the actions taken today and the investigations that preceded those actions have ended any current fraud of the unemployment system, and we will work to reiterate through employee communications regarding the ramifications of future intentional false reporting of claims as well as the new felony consequences under state law as of February 9, 2012,” he said.
Of the 18 employees interviewed by the DPS OIG, the district said, 16 admitted that they fraudulently received unemployment benefit payments while working full time at DPS. Two employees made partial admissions to receiving unemployment benefits while working full time at DPS.
“Thousands of dedicated adults come to work every day in our schools to better the lives of this community’s children,” DPS Emergency Manager Roy Roberts said. “We will not tolerate the actions of a small few who, for whatever reason, believe that they can misuse public resources for their own gain. The work of the DPS Office of Inspector General is to be commended for taking a leadership role in conjunction with other state agencies to bring this investigation, which began with a tip, to a thorough conclusion.”
In its lengthy statement on the alleged fraud, DPS explained what happened like this:
Individuals must file bi-weekly claims with the Michigan Automated Response Voice Interactive Network (MARVIN) via phone and/or online to certify for and receive unemployment benefit payments, answering nine questions about employment status for the two-week period covered. All of the individuals interviewed made bi-weekly unemployment benefit claims and certified that they were not employed. The employees provided false information to the Unemployment Insurance Agency via the MARVIN system. The employees reported no DPS income or underreported DPS income for dates in which they had DPS income to report. The employees did not report that they were back to work as full time DPS employees.
As a precaution to unintended responses to the foregoing questions, MARVIN also asks its users to certify that the information is correct. If the answer is “no,” MARVIN will ask all of the questions again.
The school district worked closely with the Michigan Unemployment Insurance Agency (UIA), Michigan Department of Licensing and Regulatory Affairs (LARA) and the Unemployment Insurance Agency’s Fiscal Integrity Group, as well as the DPS Office of Human Resources, according to DPS.
According to the DPS OIG report, Michigan law provides that intentional efforts to hide and/or give false information to qualify for, receive, or increase unemployment benefits will result in severe penalties. Claimants found to have intentionally given dishonest information:
Will be required to repay money received and will have to pay a penalty of two times (if less than $500 of improper payments) or four times (if $500 or more of improper payments).
The two times penalty is increased to a penalty of four times the amount of improper payments for second or subsequent offenses.
Will lose remaining benefits.
Will be required to pay court costs (if prosecuted) and fines, face jail time or perform community service, or all of these.
Claimants making intentional misrepresentations to obtain benefits in excess of $3,500 after February 9, 2012 may be charged with a felony at the state level.
If the employees plead guilty to unemployment compensation fraud, this is a misdemeanor and they are required to pay restitution over a two-year period, and the charges are dismissed from their record. If they fail to make the payments within two years, they are resentenced and convicted of a misdemeanor. Restitution payments are sent to the State of Michigan and payments are credited to the DPS unemployment account.
Of the 18 cases, some are awaiting prosecution, others have warrants issued or requested, and in some cases full or partial restitution has been made, DPS said.
Two current employees whose cases were investigated are on leave and will be interviewed at a later date. The individuals face other penalties under state law, including restitution of up to two or four times the amount illegally received and additional felony charges for offenses that occurred after Feb. 9, 2012.
Since its inception, the DPS Office of Inspector General has opened 550 investigations, 87 percent of which have been closed. 49 are pending and 21 are inactive. 109 employees have been referred for disciplinary hearings, and 41 have been terminated as a result of OIG investigations. Monetary restitution, recovery and cost avoidance due to OIG investigations has totaled $8,715,948.
Individuals with information on waste, fraud or abuse may contact the OIG anonymous telephone hotline at (313) 870-3436 or email tips to inspectorgeneral@detroitk12.org
