State Senate Acts To Stop Prisoner Abuse Of Unemployment Benefits

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800px-NJ_State_HouseTRENTON – Acting to prevent inmates from fraudulently obtaining public benefits the Senate on Thursday approved legislation requiring the state to establish a verification process so that unemployment checks, food stamps or Medicaid payments are not sent to prisoners.

Responding to a recent investigation that found more than 7,600 inmates illegally collected approximately $10 million, Senator Fred Madden, (D-Camden/Gloucester), Senator Paul Sarlo, (D-Bergen/Passaic), Senator Sandra Cunningham, (D-Hudson) and Senator Jeff Van Drew (D-Cape May/Cumberland/Atlantic) sponsored legislation to prevent any further abuse of benefits programs by those serving time for criminal activities.

“These benefits are intended to help those who really need it, not for those serving time for their crimes,” said Madden. “This bill will create a verification process and require state officials to check against inmate records to prevent any abuse of the system or misuse of the funds.”

The legislation would have the state Department of Corrections and the Administrative Office of the Courts supply the Department of Labor and Workforce Development and the Department of Human Services with the names and Social Security numbers of every inmate in state prisons or county jails. The Labor Department and DHS would then be required to create a verification process to make sure no checks are sent to any prisoner.

“The verification process needs to be updated and modernized to make use of computerized technology,” said Sarlo. “And state officials need to be thorough and diligent in checking all the records so these funds aren’t lost to convicted criminals engaging in fraudulent practices that amount to the theft of public resources.”

The State Comptroller recently completed an audit of the New Jersey Unemployment Compensation Program that identified the misspent funds. The majority of the fraud was committed by county inmates, exposing a weakness in the current verification process that fails to thoroughly check against county correctional records and that relies too much on informal controls, such as manual reviews of paper records. The new system would make use of electronic data that includes complete listings of county prisoners.

“There are a lot of people out of work who need and deserve these benefits to get by,” said Cunningham.

The bill also instructs the state to include death records in the reference system. A previous review of unemployment payments by the state auditor found 50 cases where a total of $237,000 was distributed after the “recipient” had died. One so-called claimant died in October of 2008 but collected more than $8,000 between February of 2010 and May of 2011 and six others were still collecting payments as of October 1, 2011 even though they died up to 11 months prior.

“The fraud that was uncovered in the public benefits program exposed a gaping hole in the system,” said Van Drew. “This bill will strengthen oversight to ensure that inmates who are being supported by taxpayer dollars are not also collecting benefits they are not eligible for and that should be going to folks that need them.”

The bill, S-2626, was substituted with A-3812, its Assembly version, and approved with a vote of 36 to 0.


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