NewsProblem Solvers


State overturns thousands of unemployment fraud cases, repays millions

Posted at 6:48 PM, Dec 19, 2016

LANSING, Mich. — The Michigan Unemployment Insurance Agency (UIA) said it recently finished a review of 22,427 fraud cases. According to the agency, 93% of those cases have been overturned. Of those cases, 2,571 people are in the process of being refunded a total of $5.4 million.midas

The FOX 17 Problem Solvers have continued to investigate the UIA's $47 million computer system MiDAS, and it's erroneous fraud accusations against citizens.

"You guys helped to unearth this, and I think now the pressure is so much the state’s going to have to respond," Congressman Sander Levin told the Problem Solvers in May.

"The federal government's into this now full blast," he added.

Levin, a Democrat representing Metro Detroit, wrote a letter to Governor Rick Snyder in the spring insisting 60,000 thousand fraud cases cited in a 2016 state audit be reviewed.

The congressman gathered with citizens outside the UIA headquarters in Detroit levindetroitat the time. They voiced concerns about MiDAS — the agency's automated fraud finder — that led to unjust wage garnishments and tax refunds being taken without impunity.

The State Auditor General produced two scathing audits this year.

"You've heard stories, and we've heard stories whose lives were harmed by this mistaken technique of the state just going over to equipment and not have any human involvement," Levin said today.

Levin reports the state took action after he penned that letter to levinpg1Snyder. But the UIA only examined about 22,000 fraud findings over the past seven months. A smaller fraction had already been reviewed in late 2015, according to the UIA. That leaves more than 30,000 cases Levin wants the state to reopen.

"We have to know how they handled them," Levin said, "and they owe it to the people — those 30,000 plus — to go back and look at each and every one of them."

levininterviewLevin said the U.S. Department of Labor provided oversight during the review. The Problem Solvers asked him what penalty the state might incur if it doesn't review the other cases.

"That's not clear, and I think the DOL wasn't adamant enough from the very beginning," Levin responded. "There's just a solemn obligation for the state of Michigan to treat every citizen fairly."

He added the Problem Solvers helped move the needle on this issue that's affected thousands of innocent citizens.

"Thanks for your initiative on this, I think... some justice will and should eventually be done."

As the Problem Solvers previously reported, state law now outlaws sole use of MiDAS in determining fraud. A state employee must verify a fraud finding. We've also reported there's at least $150 million in the contingent fund, according to state records.

Levin is calling for full transparency of the fund.



Dave Murray, Talent and Economic Development Corporation spokesperson,  released the following statement on the UIA's behalf:

"We want to thank Rep. Levin for working with us on this issue. UIA in November completed a review of cases in conjunction with the U.S. Department of Labor, and the agency continues to study fraud determinations.

"We’ve already made some changes to the fraud detection process, and we appreciate that the state Legislature this week approved a bill that codifies the reforms we’ve set in place.

"People come to the UIA when they are facing a difficult time, and we want to make sure they get the benefits they are entitled to as they seek new jobs. We will continue to work on ways to improve our services so those who deserve benefits will get what they need during trying times, while remaining vigilant in terms of fraud.

"As of August 2015, the UIA no longer uses the automated system to issue fraud determinations. Instead, trained staff investigates, reviews and makes the determination in all fraud cases, which includes the additional step of contacting the claimant and/or employer for additional information if needed."