The Building Tradesman Newspaper

Friday, August 04, 2017

State drops charges against falsely accused jobless benefits claimants

By The Building Tradesman

The State of Michigan is dropping criminal charges and arrest warrants against 186 people accused of illegally collecting unemployment benefits, state officials announced July 20.

Wanda Stokes, head of the state's Talent Investment Agency, says the action is being taken “out of an abundance of caution and in the interest of justice.” She says more than $16 million has been or will be returned to people across Michigan whose tax refunds or wages were wrongly seized.

According to the news service MIRS, the administration of Gov. Rick Snyder said it is going to re-examine those cases, along with thousands of others. Dubbed "robo-fraud," the scandal led to a 93 percent error rate after 22,427 cases were re-reviewed, according to the Unemployment Insurance Agency.

The state has acknowledged that over a two-year period, an aggressive automated computer system, without human oversight, falsely accused many people of illegally taking jobless benefits from the state. Between Oct. 1, 2013 and Aug. 7, 2015, wages were garnished, tax refunds were lost, and penalties were imposed on numerous state residents before the state admitted it was wrong. 

A number of people had to file for bankruptcy as a result of the state's actions. Many of those falsely accused have filed a class action lawsuit against the state, and on July 18, the Michigan Court of Appeals, ruled that many of those accused of unemployment fraud by a computer system did not sue quickly enough to be eligible for damages.