After the state falsely accused tens of thousands of Michigan residents of unemployment insurance fraud — garnishing wages and seizing income tax refunds to satisfy millions of dollars in penalties that were wrongly imposed — lawmakers from both parties say they are determined no such fiasco will ever happen again.
Business and labor groups are supportive of the bills they say will help prevent another rash of false fraud accusations, while at the same time addressing a growing problem of genuine unemployment insurance fraud resulting from identify theft.
But advocates for claimants say the legislation does little or nothing to help those whose lives were turned upside down when the state’s $47-million automated system for fraud detection, the Michigan Integrated Data Automated System (MiDAS), ran amok between 2013 and 2015, when it was used to identify fraud in jobless claims going back as far as 2007.
And one of those advocates says that despite state claims to the contrary, some of the tens of millions of dollars wrongly taken from Michigan residents have still not been returned.
Another key remedy — prohibiting MiDAS from making a fraud determination without review by a human being — was implemented in 2015.
The state said in Thursday it has refunded about $21 million to about 20,000 Michigan claimants. Those reimbursements followed a review, completed in August, of nearly 63,000 cases in which claimants were assessed a fraud penalty found that more than 44,000 of those cases — or about 70% — did not involve fraud.
But Lord, the Royal Oak attorney, said a review of state government accounting suggests the amount wrongly seized from claimants must be much higher. More than $46 million collected from such penalties was placed in a state contingent fund between 2014 and 2016, and that amount does not include the value of actual benefits seized, which were deposited in a separate fund, Lord said.
— source freep.com | Dec. 1, 2017
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