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Fear of filing: State seized millions in tax returns for alleged unemployment fraud

Posted at 5:38 PM, Mar 11, 2016
and last updated 2016-05-06 15:57:17-04

KENTWOOD, Mich. -- Nykesha Witherspoon said she filed for and collected unemployment in 2011. However, the Unemployment Insurance Agency wanted the money back and sent the Kentwood woman a letter in 2013.

It said she was overpaid. Not only that, the mother of two was accused of committing fraud. So a penalty quadrupled her alleged restitution. She's being told she owed $35,000 in fines and penalties.

She had hearings. Court records show the UIA didn't show up to the first hearing. The judge ruled in her favor and said the agency failed to give a reason for the so-called fraud. However, the agency fought to overturn the ruling and claimed she misreported her income.

"They also took my income tax refund from last year," Witherspoon said.

Her refund was worth just under $4,500. Fearing it would also be taken this year, she hasn't filed her taxes yet.

Agency records FOX 17 obtained through the Freedom of Information Act show the state is raking in a lot of money. The UIA took more than $30 million in state and federal tax returns last year. That's hard-earned money from people accused of fraud who may have been innocent.

FOX 17 learned in the fall that case reviews by the UIA proved thousands of people were innocent. It's not clear how much the agency had to give back.

"There's no way I can pay all that back, cause I know I didn't commit any fraud. So, that's what I've been fighting for; to prove that I didn't commit any fraud," Witherspoon said.

She adds that she's been working for the same employer, a hotel, for the past seven years. She's now part-time.

The Problem Solvers have reached out to the agency on her behalf to try and get some answers.