A person who is receiving unemployment benefits may forget to inform the NJ Department of Labor and Workforce Development Division Unemployment Insurance that he/she has begun working again. In other cases, a person could have taken on a small side job to help pay bills. Either scenario can be seen as unlawfully receiving unemployment benefits.
Falsely obtaining unemployment benefits is a fraud crime in New Jersey and can lead to serious penalties including prison time and a hefty fine.
These penalties imply that someone has genuinely tried to pull the wool over the eyes of the government. For those who have committed an innocent mistake, it is critical to hire a skilled criminal defense attorney who can present the facts of the case and avoid the worst consequences.
What is Falsely Obtaining Unemployment Insurance Benefits?
Obtaining unemployment benefits while working is punishable under New Jersey’s Insurance Fraud statute (N.J.S.A. 2C:21-4:6). The statute reads:
A person is guilty of the crime of insurance fraud if that person knowingly makes, or causes to be made, a false, fictitious, fraudulent, or misleading statement of material fact in, or omits a material fact from, or causes a material fact to be omitted from, any record, bill, claim or other document, in writing, electronically, orally or in any other form, that a person attempts to submit, submits, causes to be submitted, or attempts to cause to be submitted as part of, in support of or opposition to or in connection with: (1) a claim for payment, reimbursement or other benefit pursuant to an insurance policy, or from an insurance company or the “Unsatisfied Claim and Judgment Fund Law,” P.L.1952, c.174 (C.39:6-61 et seq.); (2) an application to obtain or renew an insurance policy; (3) any payment made or to be made in accordance with the terms of an insurance policy or premium finance transaction; or (4) an affidavit, certification, record or other document used in any insurance or premium finance transaction.
In the case of one who tries to receive benefits while working, the offender “causes a material fact to be omitted.” This omitted fact is that he/she is employed.
However, not every person who is charged with this is willfully gaming the system. Sometimes, an individual will legally be entitled to unemployment benefits in New Jersey, but months later begin working.
This person may forget to tell New Jersey that he or she found work. Later, he/she receives a check in the mail thinking that—despite finding work—he/she is somehow still entitled to benefits. Thus, without thinking much about it, he/she continues to deposit these checks even though he/she is employed.
In such a case, the law will presume that the defendant knew or should have known that being employed bars his/her ability to continue to collect unemployment benefits.
Ultimately, cashing that check and not informing New Jersey is treated as an “omission” of a relevant fact. As a result, this can be grounds for being charged with violating N.J.S.A. 2C:21-4:6.
Penalties and Fines
Violating N.J.S.A. 2C:21-4:6 can be a second- or third-degree crime depending on the circumstances. It will be a second-degree crime if a person knowingly commits five or more acts of insurance fraud and the aggregate value of the benefits received are at least $1,000.
Most other types of Insurance Fraud are third-degree crimes.
Most importantly, each act of insurance fraud shall constitute an additional, separate and distinct offense. This means cashing five unemployment benefit checks while one is actually working is considered five separate fraud crimes! Consequently, if a person cashed five checks each for at least $200, he/she can face charges for second-degree Insurance Fraud.
The potential penalties are as follows:
In addition, a person convicted can be required to repay the unemployment benefits that were not lawfully earned–plus interest and other penalties!
How to Beat a Charge of Falsely Obtaining Unemployment Benefits?
There are several ways that a person can avoid a conviction for unlawfully receiving unemployment benefits. One is to prevent the prosecution from proving that the accused was working during the period in question. This could involve getting evidence suppressed (meaning it is not allowed to be presented in court) or providing exculpatory evidence (meaning evidence that supports one’s innocence).
Another is to show that an effort was made to communicate with the NJ Department of Labor about the new work. Remember: There are scenarios in which a person can return to part-time work and still receive unemployment benefits. Unfortunately, this can lead to confusion regarding when, exactly, a person should stop receiving unemployment benefits.
Consequences for a First Offense
For minor instances of third-degree Insurance Fraud, including unlawfully receiving unemployment benefits, a person may be able to avoid going to prison upon conviction. Most third-degree or lesser crimes carry what is known as a presumption of non-incarceration (PNI).
PNI means that a judge must consider alternatives to prison for first-time offenders. However, if the offense is charged as a second-degree crime, then PNI no longer applies.
In addition, for those charged with additional crimes, such as Theft by Deception, a judge is unlikely to accept a probation-only or alternative sentence. The same is true of those charged with multiple counts of Insurance Fraud.
That’s why even a first-time offender needs the help of a skilled attorney. The attorney can negotiate to consolidate or reduce the charges to an offense that carries little or no jail time should a conviction occur. An attorney can also present a case with the best chance of avoiding a conviction altogether.
Enrolling in NJ Diversionary Programs
A person charged with falsely obtaining unemployment benefits could potentially avoid a conviction by enrolling in a diversionary program known as Pre-Trial Intervention (PTI). Those who enter a PTI program may be asked to perform community service, attend counseling, or report to a probation officer. The exact details will be determined by a judge based on the defendant’s background and the charges in question.
If the defendant completes all the program requirements, the charges will be dropped—no criminal record, no prison time.
NJ limits enrollment and qualifications are strict. Even those who are well qualified can be denied admittance. An attorney can best assess whether it is worth the time and effort to apply for PTI or a similar diversionary program.
Expunging a Conviction for Falsely Obtaining Unemployment Benefits
New Jersey offers many people with criminal convictions the opportunity to expunge (clear) a criminal record. Those who have a conviction for Insurance Fraud, including fraudulently obtaining unemployment insurance, may be eligible if they otherwise meet the necessary criteria.
A person cannot have more than 1 indictable offense on his/her record if he/she wishes to file a petition for expungement. That means a person who has been charged with two or more counts of Insurance Fraud may not be eligible. In addition, a person cannot have more than 3 disorderly persons offenses on the record.
Obtaining an expungement requires filing a petition with the court where he/she was convicted. If there were multiple convictions in different courts in NJ, then he/she will have to file the petition in each of those courts.
Expungement paperwork is complicated and filling it out properly is critical to convincing a judge to grant the expungement. In some cases, a hearing with a judge and a prosecutor may be required. For these reasons and more it is urgent that a person hire an experienced attorney to help with the expungement process.