Levin demands review of alleged fraud in Michigan’s jobless benefits program

A top House Democrat is calling on Michigan’s governor to review all instances where the state’s automated computer system mistakenly detected thousands of cases of unfounded fraud in unemployment insurance claims. 

Rep. Sander Levin (D-Mich.) is urging Republican Gov. Rick Snyder to insist on a full probe of the claims of fraud made by the state’s Unemployment Insurance Agency’s (UIA) system and to fully reimburse those who were financially harmed by any inaccurate decisions.

{mosads}”I find it shocking and deeply concerning that the state has not gone back and sought to verify allegations of fraud and moved to repay any unemployed worker who was wrongly accused and whose wages or tax refunds were wrongly garnished or were required to pay penalty without proper notice,”  Levin wrote in the letter to Snyder. 

Through the fall of 2015, UIA only reevaluated a small portion of the more than 60,000 computer-determined fraud cases, focusing only where an individual had appealed, Levin said.

The state collected $57 million — nearly 20 times more than the $3 million that was held in the fraud account in 2012 — in penalties and garnished wages and tax returns from March 2014 to March 2015. 

During that period, the system detected about 27,000 fraudulent unemployment insurance claims, which was five times the typical number.

Levin places blame on an unmanned computer system — the Michigan Integrated Data Automated System (MiDAS) — put into place in October 2013, which made the determinations of unemployment claims fraud without human oversight.

Levin said that while the UIA has taken small steps to rectify the problems, the agency must verify that all previously alleged instances of fraud were actually fraud.  

“Where mistakes were made, Michiganders should absolutely receive their money back,” Levin wrote.

The ranking member of the House Ways and Means Committee pointed out that in February the Michigan auditor general found that the computer-determined fraud was affirmed in only 8 percent of appeals, with 64 percent reversed or dismissed, and 22 percent where the agency was asked to review cases again.

Levin said that while the computer system is no longer in violation of federal law and that a bipartisan effort underway in the state legislature to address problems with the system.  

“But I am dismayed to learn that the state continues to resist recommendations to improve current notice procedures so they meet federal requirements,” he said.  

Levin said that the “foot dragging” was verified in recent days by the Michigan auditor general which found that unemployment benefits agency “needs to improve its efforts to obtain and/or consider supporting information and provide claimants with the facts and rationale when accusing claimants of providing false or misleading information.”