UIC 2101 – California Unemployment Insurance EDD Fraud
EDD Fraud – Table of Contents
UIC 2101 – Overview
The Unemployment Insurance program in California was started in 1935. State Unemployment Insurance, sometimes called “UI,” is a hybrid federal-state insurance program administered by the Employment Development Department (EDD).
Employers finance UI because it is intended to aid those who have lost their employment through no fault. Unemployment insurance (UI) claimants may get weekly benefits of up to $450 if they qualify.
It is an offense in this chapter to make a false statement or representation willfully, to withhold knowledge of a material fact knowingly, or to use a false name, social security number or any other false identification to obtain, enhance, decrease, or defeat any benefit or payment under any of the following statutes administered by the department, whether for the maker or any other person:
- The rules are set out in this division.
- The guidelines of any federal statute governing unemployment insurance.
- The terms of any federal statute governing training allowances.
- The terms of any federal statute governing trade readjustment allowances.
- The terms of any other federal government allowance legislation.
Nothing in this section should be interpreted as preventing the Penal Code’s Section 470 from being applied to any actions or omissions that contradict it.
Employers may be responsible for unemployment insurance fraud.
California’s unemployment insurance fraud laws apply to both employees and employers. Examples of employer-committed EDD fraud include:
- Knowingly lying about why a former employee was dismissed or how much the person earned to avoid paying into the unemployment insurance program, or
- willfully withholding deductions from workers and not paying them to the Employment Development Department.
Examples of unemployment insurance fraud
- Obtaining unemployment benefits by creating a false identity
- Collecting unemployment benefits while working elsewhere and without disclosing it
- Using a different person’s unemployment check without their consent
- Receiving benefits from a state you don’t live in
- Not actively seeking new employment or providing fraudulent grounds for unemployment.
UIC 2101 – Penalties
Section 2101 of the Unemployment Insurance Code
If discovered defrauding the system and found guilty of unemployment insurance fraud, they will face severe punishments. This offense is a “wobbler” in California, which means it may be sentenced as either a misdemeanor or felony. If it is a misdemeanor under UIC Section 2101, you might face the following:
- Penalties of up to $20,000
- One year or more in county jail
If it is a felony under this code provision, you may be subject to the following:
- 16 months, or two years to three years in state jail, as well as,
- penalties of up to $20,000
Section 550 of the Penal Code
Additionally, the prosecutor can decide to file charges against you under California Penal Code Section 550, the state’s general insurance fraud law. Similarly, depending on how much money you get via deception, you might be charged with a felony or a misdemeanor. If the fraud is under $950, it is considered a misdemeanor and is penalized by:
- $1,000 in maximum penalties
- Six months or more in a county jail
The following are the misdemeanor penalties if the fraud exceeds $950:
- $10,000 in maximum penalties
- One year or more in county jail
The repercussions for a felony conviction are far more severe. These sanctions consist of the following:
- 2, 3, or 5 years in state jail,
- up to $50,000 in penalties, or
- double the amount of fraud, whichever is larger.
UIC 2101 – Defenses
The most common legal defenses are as follows:
Lack of Fraudulent Intent
While ignorance of the unemployment law is not per se a defense, it may help show that no dishonest intent was involved. Reasons for leaving or being let go from your employment would fall under this category. You may have entered an incorrect Social Security number or thought you could keep collecting benefits while working fewer hours than required.
Proof beyond a reasonable doubt is needed to find you guilty. This includes evidence of criminal intent and knowledge of the criminal activity. You will not be charged or prosecuted if the evidence is insufficient to incriminate you.
Negotiating a Plea Deal
In certain situations of unemployment insurance fraud, your guilt is beyond question. In such circumstances, your attorney may seek to negotiate a fair plea deal with the prosecutor.
When there are no vulnerabilities in the evidence against you for fraud, a plea bargain is a very effective means of mitigating culpability. The prosecution can agree to a reduced criminal charge and punishment in return for your “guilty” or “no contest” plea.
UIC 2101 – Hire Us
An attorney may either go to trial on behalf of a client charged with violating Unemployment Insurance Code Section 2101 or attempt to negotiate a more lenient plea agreement on their behalf. Proposition 36 sentencing provides for a suspended sentence to include probation and drug treatment in the case of defendants guilty under Health and Safety Code Section 2101.
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Seppi Esfandi is an Expert Attorney who has over 21 years of practice defending a variety of cases.
How to Win Your Case
We cannot stress enough that you read, understand and follow these 10 basic rules if you are criminally charged or under investigation:
- Don’t ever talk to the police
- Do not discuss your case with anyone
- Everything you tell your lawyer is confidential
- Tell police you need to contact your attorney
- Never consent to any search by the police
- If the police knock on your door, don't answer!
- Realize the consequences of a criminal conviction
- Your lawyer (not you) will contact any witnesses
- Information on your cell phone is evidence
- Early Intervention is the key