Bill to increase criminal penalties for benefits fraud advances

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A state Assembly panel gave its blessing Tuesday to a proposal that would increase the criminal penalties for fraudulently obtaining unemployment benefits.

State law already has penalties for unemployment claimants who conceal material facts related either to their ability to obtain benefits or to the wages they had earned while working. Those who are found to have committed a violation known as concealment can be forced to pay back the money they received from the state, as well as a penalty equal to 40 percent of that amount.

A person can also be criminally charged with concealment and then face penalties ranging from $100 to $500 in fines and as many as 90 days in prison for each offense.

The proposed bill would ratchet up those criminal penalties, increasing them in accordance with the amount of benefits a claimant illegally obtained. If the benefits fraudulently obtained total $2,500 or less, a claimant would face a maximum of $10,000 in fines and nine months in prison.

For those who obtained more than $2,500 worth of benefits, the offense would become a felony and the criminal penalties would range from three years in prison to 10 years and a maximum of $25,000 in fines, depending on the value of the benefits received.

At Tuesday’s executive session, the Assembly Committee on Public Benefit Reform approved the bill on a 10-5 vote along party lines. They also amended the bill in a way that removed provisions instructing district attorneys on how to decide whether to charge claimants

Although Rep. Evan Goyke, D-Milwaukee, voted in favor of the amendment, he nonetheless declined to support the bill. He said the amendment was good because district attorneys already have discretion to decide whether to charge claimants separately for each offense and thus need no further statutory guidance.

Even with the change, though, he said the bill was troubling for a number of reasons. For one, he argued the proposed penalties would not deter people from fraudulently claiming jobless benefits.

Goyke and other committee Democrats had offered an amendment to the bill that would have created identical language aimed at employers. The committee did not adopt it, though, on Tuesday.

“What this bill does without this amendment is create two penalty structures,” Goyke said. “That’s not how we do criminal law… The penalties should rest on the culpability of the actor. Now we’ve increased the ceiling for employees but not employers.”

State Rep. Mark Born, committee chairman and a Republican from Beaver Dam, said the amendment was unnecessary because the state’s party-to-a-crime statute already lets prosecutors charge employers who help their employees fraudulently obtain jobless benefits. He also said a recently introduced bill, Assembly Bill 819, should alleviate Democrats’ concerns about employers.

That bill would make various changes to unemployment law, including worker misclassification and revising the definition of concealment. An assembly committee has invited the public to comment on the bill on Thursday. Follow @erikastrebel