Detroit city employees charged with unemployment insurance fraud

33 current, former Detroit city employees accused of collecting $400K in fraudulent unemployment benefits

DETROIT - More than two dozen current and former Detroit city employees are facing charges for their alleged involvement in unemployment insurance fraud which cost the state of Michigan $400,000.

On Thursday, 33 misdemeanor arrest warrants were signed at Michigan's 36th District Court in Detroit and 18 of them are for current Detroit city employees.

The current and former employees are charged with unemployment compensation fraud as they are accused of collecting nearly $400,000 in unemployment benefits they were not eligible to receive by making false statements to the Michigan Unemployment Insurance Agency about their employment status. They are expected to be arraigned in the next few days.

The city of Detroit has to pay the state of Michigan for unemployment payments it makes to laid-off employees, and payments made as the result of fraud could, in this case, cost the city hundreds of thousands of dollars.

View: Detroit Office of Inspector General's release

According to the Detroit Office of Inspector General, in some cases the defendants claimed unemployment benefits despite continuing to work full time for the city. In other cases, full-time city employees collected benefits while claiming they had been laid off. Some of the charges cover alleged fraud dating back to 2008.

The accused employees come from a variety of Detroit departments including the Water and Sewerage Department, Recreation Department, Human Resources, Elections, Finance and General Services. Detroit Inspector General James Heath wants the 18 current employees to be fired and barred from working for the city in the future.

"Not only is it mind-blowing, it's sickening, frankly," said Heath. "We are making recommendations that those employees be terminated and not work for the city of Detroit anymore because they're fraudulent actions, frankly, have caused a significant financial loss to the city of Detroit."

The Office of Inspector General says their investigation into Detroit employees' unemployment insurance fraud is ongoing, and more charges could be coming.

According to Michigan Unemployment Insurance Agency, unemployment fraud is potentially committed whenever a claimant or employer conceals or misrepresents any eligibility information that can affect benefits paid.

View/download: UI benefit fraud FAQ sheet

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