Fraud FAQs

What things do individuals do that DES may consider fraudulent?

What things do individuals do that DES may consider fraudulent?

The most common types of UI fraud committed by claimants include:

  • Claiming benefits without looking for work;
  • Help other claim benefits that they are not entitled to;
  • Returning to full-time while collecting UI benefits without reporting your work and earnings;
  • Working a part-time job without reporting your earnings;
  • Failing to report earnings for a week that you performed work;
  • Withholding information from DES or DWS;
  • Performing temporary work while collecting UI benefits without reporting your earnings;
  • Reporting inaccurate hours and earnings;
  • Collecting benefits based on false or inaccurate information that you provided;
  • Claiming benefits while unable or available for work; and
  • Identity theft.
How will I know if DES thinks that I committed fraud?

How will I know if DES thinks that I committed fraud?

A fraud investigator will contact you to get information. The investigator may find that you received benefits that you should not have received, but that you did not get them because of fraud. In that case, DES will send you a notice of non-fraud overpayment. If the investigator finds that you got benefits because you committed fraud, DES will send you a notice of fraud overpayment.

Can DES do anything if I decide not to repay my fraudulent overpayment?

Can DES do anything if I decide not to repay my fraudulent overpayment?

  • Your federal and state tax refunds will be intercepted to repay your debt.
  • Any North Carolina lottery winnings will be intercepted and put toward your debt.
  • Future UI benefits that you’re entitled to may be used to pay your debt.
  • DES may attach or garnish your intangible property.
  • DES may attach or garnish your wages.
  • DES may seek to have you charged with a crime and prosecuted.
  • DES may file a civil suit against you.
  • If you get a job with the State of North Carolina, DES will try to recover the overpayment under N.C. Gen. Stat. § 143-553.
What penalties will I face if I commit fraud?

What penalties will I face if I commit fraud?

  • You must repay total amount overpaid.
  • You will pay an additional 15% of the overpaid amount as a penalty if the fraudulent overpayment happened after October 1, 2013.
  • You will be disqualified from receiving UI benefits for one year.
  • If you don’t repay the amount before you file another claim for benefits after your year of disqualification ends, 100% of any weekly benefits that you would get from the new claim will be used to pay your debt.
  • DES may work with your local district attorney’s office to prosecute you.
    • If the fraudulent overpayment happened before December 1, 2012, you may be charged with a Class 1 Misdemeanor, and face a fine and up 120 days in jail.
    • If the overpayment happened on or after December 1, 2012 and is more than $400.00, you may be prosecuted for a Class I Felony and face a fine and up to 12 months in prison.
    • If the overpayment happened on or after December 1, 2012 and is $400 or less, you may be charged with a Class 1 Misdemeanor, and face a fine and up 120 days in jail.
What things do employers do that may be considered fraud?

What things do employers do that may be considered fraud?

The most common types of UI fraud committed by employers include:

  • Helping to file a false claim for benefits;
  • Misclassifying workers as independent contractors to avoid paying UI contributions;
  • Failing to report, or inaccurately reporting employee wages;
  • Paying employees secretly, or off-the-books or under-the-table;
  • Shifting workers between employer payrolls to use a lower UI contribution rate;
  • Failing to report when you hire new employees;
  • Reporting incorrect start dates for employees;
  • Providing false information to prevent a claimant from getting benefits;
  • Failing to pay UI taxes;
  • Failing to file reports; and
  • Keeping DES from inspecting business records.
What are the penalties for employers who commit UI tax fraud?

What are the penalties for employers who commit UI tax fraud?

  • Employers must pay the total amount of taxes owed, interest, and late-payment penalties.
  • DES may work with your local district attorney’s office to prosecute you. You could be charged with a Class 1 misdemeanor and face a fine and up to 120 days in jail for each count.
  • You may have to pay a penalty of 50% of the tax amount owed.
  • You will pay a monthly penalty of 5% of the taxes owed for not filing by the original due date, up to 25% of the total owed.
Can I be held responsible if I help someone else with their taxes?

Can I be held responsible if I help someone else with their taxes?

Yes.  It is illegal to attempt to, or help someone evade taxes. Anyone who schemes with an employer to evade taxes or payment can be prosecuted for a Class H felony and face a fine and up to 25 months in prison.  If an income tax return preparer schemes and helps in filing or presenting documents that contain fraudulent or false information, the preparer could be prosecuted for a felony depending on the amount of taxes evaded and could face a fine and between 4 and 182 months in prison.