Governor signs DeMarco bill to stiffen penalties for unemployment compensation fraud

MONTGOMERY – Gov. Robert Bentley on Tuesday signed into law a bill by Rep. Paul DeMarco (R – Homewood) that will stiffen penalties for those who are caught fraudulently receiving unemployment compensation from the state. 

 “Committing fraud to obtain unemployment benefits is a serious crime and its punishment will soon match the serious offense once this law and its provisions go into effect,” DeMarco said.  “With its passage, the taxpayers and business owners have been given another layer of protection from fraud, and those who seek to steal taxpayer-funded unemployment benefits will be forced to think twice before breaking this law.”

The Alabama Department of Industrial Relations estimates that during Fiscal Year 2011, more than 12,000 individuals fraudulently received unemployment compensation benefits originally meant to aid unemployed workers and families who need help in these difficult economic times.  The total amount siphoned through the crime is in excess of $15 million.

Under the provisions of House Bill 72, those caught defrauding the unemployment compensation fund of more than $2,500 will be guilty of a Class B felony.  Less than $2,500 constitutes a Class B felony, and less than $500 is a Class A misdemeanor.

Those who cheat the system will also be disqualified from receiving any unemployment benefits for a 52-week period, and subsequent offenses will be punished by a 104-week disqualification. In addition, those found guilty of fraud would be forced to repay the fraudulently-received benefits along with an interest penalty to the Alabama Department of Industrial Relations.