Fraud - Section 8-809(b), 8-1301, 8-1305(b)(2) Overpayments-COMAR 09.32.07.05 - Maryland Unemployment Decisions Digest - Appeals
The provisions dealing with fraud are located in Sections 8-809(b), 8-1301 and 8-1305(b)(2) of the Labor and Employment Article of the Maryland Annotated Code.
Pursuant to Section 8-809(b), if a claimant knowingly makes a false statement or knowingly fails to disclose a material fact to obtain or increase benefits, the claimant is disqualified from receiving benefits. Any benefits received as a result of the false statement or omission are overpayments and may be recovered by the agency. The claimant must repay the overpayment plus interest of 1.5 percent per month from the date the claimant is notified of the amount to be recovered.
Additionally, Section 8-1305(b)(2) provides that the claimant is barred from receiving any benefits for one year from the date that the determination is made that the claimant filed a claim involving a false statement or omission.
In addition, criminal prosecution may result from false statements under Section 8-809(b). If convicted, a claimant is guilty of a misdemeanor and may be fined up to $1000, imprisoned up to 90 days, or both.
Fraud - Section 8-809(b), 8-1301, 8-1305(b)(2)
I. In General
A. Burden of Proof
In order to find a claimant disqualified under Section 8-809(b), it is not necessary that fraud be proven "beyond a reasonable doubt." Cronhardt v. Venture Vending, 854-BH-81.
The claimant was eligible for benefits of $180 per week. During a number of weeks that he filed for and received benefits, he earned money in excess of his weekly benefit amount. The employer was not present at the hearing and the agency entered virtually no evidence. Neither claim forms nor claim checks were entered. The only evidence that the claimant made a false statement was that the agency's computer paid an excessive amount of benefits during a number of weeks. There are many reasons why this could have occurred. Without direct evidence, the Board will not infer that the claimant knowingly filed a false statement in order to increase his benefits under Section 8-809(b). However, the claimant clearly was overpaid benefits within the meaning of Section 8-809(a). Faulcon v. Warren-Ehret Company of Maryland, 994-BH-91.
The claimant received benefits of $108 per week for each of six weeks. The claimant also had earnings during each of these weeks. The claimant earned $65 the first week and $323 per week for the next five weeks. Clearly, the claimant was eligible for only a partial check for the first week, and nothing for the next five weeks. However, there is insufficient evidence that the claimant submitted a false statement, much less knowingly submitted such a statement. It cannot be inferred merely from the fact that the claimant was paid, that she must have submitted false claim forms. There is no direct evidence that the claimant submitted a false statement. A finding that the claimant committed a fraudulent act, based solely on the fact that the benefit system paid her claims, is inappropriate. Hines-Tyler v. Naval Academy Athletic Association, 1288-BR-91.
The Agency has the burden of proof in cases involving overpayment under Maryland Code Annotated, Labor and Employment Article, Section 8-809(a) and fraud under Sections 8-809(b), 1301 and 1305. In the Lower Appeals Division hearing, the appellant/claimant had the burden of moving forward; however, the burden of proof remained with the Agency. The Agency, although duly notified of the hearing, failed to appear. By electing not to participate, it assumed the risk of an adverse decision. The Board and the Lower Appeals Division must treat the Agency consistent with its treatment of employers and claimants and cannot afford it any more or any less substantive or procedural due process rights. Agency documents, even if they were admitted into evidence, are hearsay and should be given little if any weight. In this case, Agency documents were not in evidence and therefore, were not considered by the Board in its review. Without Agency documentation raising the issue of whether the claimant has or has not reported wages, the Agency failed its burden of putting on a prima facie case. It is not the claimant’s burden, duty or obligation to prove the Agency’s case. The claimant’s statements do not support a finding that the claimant was overpaid or committed fraud in order to obtain or increase benefits to which he was not otherwise entitled. The Board holds that the claimant did not knowingly make false statements or knowingly fail to disclose material facts to obtain or increase benefits within the meaning of Maryland Code Annotated, Labor and Employment Article, Sections 8-809(b), 1301, and 1305. Brown v. Manpower International, Inc., 3106-BR-09.
B. Element of Intent
Whether the claimant deliberately failed to disclose a material fact in order to obtain benefits, within the meaning of Section 8-809(b), is a question of intent. Bogan v. OCS Home Remodelers, 1555-BH-82.
The claimant corporate officer performed sporadic services for a remodeling company for which he received no pay or other remuneration. The claimant collected unemployment insurance benefits. The fact that the claimant failed to disclose that he was a corporate officer does not automatically create a disqualification under Section 8-809(b), especially since he was never asked about his corporate officer status. Further, the claimant believed he was entitled to benefits because he received no wages and therefore had no intent to defraud the agency. Bogan v. OCS Home Remodelers, 1555-BH-82.
Where a claimant reported his self-employment status, in addition to wages earned at other part-time employment, the claimant's failure to report remuneration received in self-employment does not support a finding of fraud under Section 8-809(b). The claimant was attempting to comply with the requirements of the law and had no intention of withholding information to obtain or increase benefits. Joy v. Atlantic Vinyl Repair Service, 392-BH-84.
The claimant testified that he called the local office when he began working and was told that he did not need to report his earnings or cease filing claims until he actually received wages. The claimant received wages within two weeks, but did not report them because he disputed the wages with the employer. Within another week, this dispute was resolved. The claimant filed several subsequent claim forms on which he did not indicate that he was working. Even if the claimant was instructed, as he testified, by the local office, he should have reported his wages after his dispute over the wages was resolved. The claimant gave no rational explanation as to why he continued to file claims after he was both working and receiving paychecks. The claimant's falsification of his claim forms was done deliberately and knowingly and with the intent of obtaining benefits. Ruttenberg v. Midwest Com System, 814-BH-84.
II. Actions Which Constitute Fraud
A. Failure to Report Wages
The claimant was employed with Tire-Riffic, Inc. from June 7, 1988 until March 16, 1989. During the time the claimant was employed with this employer, he filed claim forms and received unemployment benefits from the week of July 2, 1988 through November 12, 1988 and for one week in March, 1989. During the time that the claimant filed claim forms, he failed to report that he was working and the amount of money he was earning. The claimant knowingly made false statements and knowingly failed to disclose material facts in order to obtain benefits to which he was not entitled. Brown v. Tire-Riffic, Inc., 359-BH-90.
B. Endorsing Benefit Checks
C. Submission of False Documents
The claimant's submission of false documents (wage report and pay stubs) in order to meet the monetary eligibility requirements of Section 8-803 was clearly attempted fraud under Section 8-809(b). Paglialonga v. Marie's Tavern, 837-BH-82.
D. False Statement
At the time of his employment, the claimant failed to reveal to the employer his prior criminal record. In his hearing held before the hearing examiner, the claimant testified under oath that he had been accused of breaking and entering in the state of Massachusetts, but it was only an accusation. The evidence at the Board hearing proved that the claimant was convicted of assault and battery with a deadly weapon and of daytime breaking and entering a dwelling. He served six months in the Massachusetts House of Correction. Whether the claimant deliberately failed to disclose a material fact in order to obtain benefits within the meaning of Section 8-809(b) is a question of intent. The claimant's testimony at the hearing clearly establishes his intent to make a false statement for the purpose of receiving unemployment benefits. Hilliard v. Town of Glenarden, 630-BH-89.
The claimant filed a claim for unemployment insurance benefits for the week ending August 6, 1988. On his claim form for that week, the claimant stated the names of two job contacts. However, that was a false statement. The claimant was disqualified from receiving benefits from October 4, 1988 and for the one year period immediately following. McCray, 899-BH-89.