It is fraud in Nevada to lie for the purpose of obtaining benefits from unemployment insurance (UI). Unemployment insurance fraud can be perpetrated by either former employees or employers.1
Unemployment Insurance Fraud Defenses
Common defenses to Nevada charges of unemployment insurance fraud are:
- No “intent to defraud”
- Administrative error
- Mistaken identity
Unemployment Insurance Fraud Penalties
Scroll down for more information on the Nevada offense of unemployment insurance fraud.
Legal Definition of “Unemployment Insurance Fraud” in Nevada
The purpose of unemployment insurance (“UI”) is to help sustain recently laid-off workers while they search for new jobs. The state agency that manages UI in Nevada is the Nevada Employment Security Division. The program is funded by taxes paid by employers.3
In order to be eligible for UI in Nevada, the former employee (“claimants”) must meet the following qualifications:
- Claimants must be unemployed or employed less than full-time;
- Claimants must have been out of work through no fault of their own;
- Claimants must be available to search for and accept employment customary to their normal occupation;
- Claimants must not refuse suitable work when offered;
- Claimants must be physically and mentally able to work; and
- Claimants must have worked long enough to qualify for unemployment benefits4
Unemployment insurance is usually not available to workers who have been fired at their own fault.
Unemployment Insurance Fraud in Nevada:
UI fraud occurs when employers or former employees lie to the insurer in order to collect or keep money they are not entitled to.5Bunkerville criminal defense attorney Michael Becker gives an example of UI fraud in Nevada:
Example: Max was fired from his blackjack dealer job at the Mirage for stealing chips from the table. Max then files for unemployment insurance and claims that he was laid-off due to downsizing. The Nevada Employment Security Division investigates and discovers that Max was lying about how he lost his job. They inform the Las Vegas Metropolitan Police, who then arrest Max and book him at the Clark County Detention Center for unemployment insurance fraud.
Max in the above example could liable for UI fraud because he lied about being laid off order to collect on benefits he was ineligible for. Other examples of UI fraud where a former employee is wrongly trying to obtain benefits include the following:
- Collecting unemployment while secretly working at another job
- Collecting other monies (such as a pension) without reporting it to the state while on unemployment insurance
- Cashing another person's unemployment check without permission
- Using a fake name, social security number, etc., to receive unemployment benefits while continuing to work elsewhere
- Falsely claiming to look for work while receiving unemployment insurance
- Fabricating an employer and claiming to be a laid-off employee in order to receive unemployment benefits
Conversely, typical scenarios of unemployment insurance fraud perpetrated by employers are the following:
- Lying about why an employee was terminated or about their salaries in order to avoid paying out insurance money
- Intentionally withholding employee deductions and not paying them to the state
Investigation and Prosecution of UI Fraud in Nevada
The Nevada Employment Security Division is skilled at finding “red flags” in UI applications that suggest the claimant is lying. And people with tips about alleged UI fraud suspects can contact the Division by filling out an online form. If the Division believes fraud may have occurred, the case will be referred to law enforcement.
Note that a claimant who makes multiple false statements in support of a UI claim face prosecution for just that one claim, not for the multiple misrepresentations.6Moapa criminal defense attorney Neil Shouse illustrates this rule with an example:
Example: Stella is employed full-time in Mesquite but is struggling to pay her bills. She fills out an unemployment insurance application and claims to have been laid-off. Later the Nevada Employment Security Division calls Stella to ask some questions, and Stella lies about not having a pension.
If the Division discovers her two misrepresentations, the Mesquite Police could arrest her and book her at the Mesquite Detention Center for UI fraud. But even though she lied twice-about being laid-off and not having a pension - she faces only one UI fraud charge. This is because Stella made only one UI claim, and both lies were in support of that claim.
If Stella in the above example falsely applied for unemployment insurance on two separate occasions, then she could face two counts of UI fraud in Nevada.
Defenses to “Unemployment Insurance Fraud” in Nevada
The following are three common defense strategies to fight Nevada charges of unemployment insurance fraud:
- Administrative error. Nevada judges are also aware that government agencies make mistakes all the time and then try to lay fault on innocent people. The Nevada Employment Security Division handles tens of thousands of cases, and inevitably some fall through the cracks. If the defense attorney can show that the defendant is a victim of a clerical error, the UI fraud case should be dropped.
- No fraudulent intent. Nevada judges are aware that applying for unemployment insurance is confusing and bureaucratic. It is easy for well-meaning people to make honest mistakes, especially for Nevadans who speak little or no English.7 Typical errors are writing the wrong social security number, miscalculating earnings, and forgetting to report freelance income. As long as the prosecution cannot demonstrate beyond a reasonable doubt that the defendant acted with intent to defraud, the UI fraud charges should be dismissed.
- Mistaken identity. In some UI fraud cases, defendants are the victims of identity theft. The real culprits steal the defendant's personal information in an attempt to collect benefits. If the prosecution cannot show that the defendant propagated the fraud, then the case should result in an acquittal.
Penalties for “Unemployment Insurance Fraud” in Nevada
- 1 - 4 years in Nevada State Prison,
- maybe up to $5,000 in fines,9
- restitution in Nevada (repayment of the fraudulently obtained benefits plus interest), and
- possibly court costs and costs to reimburse the state for prosecuting the case10
Note that the D.A. may be willing to lessen the charges to a misdemeanor offense depending on the case. Misdemeanors in Nevada carry up to 6 months in jail and/or up to $1,000 in fines.
Accused of unemployment insurance fraud? Call a lawyer…
If you have been charged with “unemployment insurance fraud” in Las Vegas, call our Las Vegas criminal defense lawyers at 702-DEFENSE (702-333-3673) for a free phone meeting. We may be able to get the charges reduced or dropped so your record stays clean.
We represent clients throughout Nevada, including Las Vegas, Henderson, Washoe County, Reno, Clark County, Carson City, Laughlin, Mesquite, Bunkerville, Moapa, Elko, Pahrump, Searchlight and Tonopah.
To learn about California unemployment insurance fraud law, go to our information page on California unemployment insurance fraud law.
- Presenting or causing to be presented any statement to an insurer, a reinsurer, a producer, a broker or any agent thereof, if the person who presents or causes the presentation of the statement knows that the statement conceals or omits facts, or contains false or misleading information concerning any fact material to an application for the issuance of a policy of insurance pursuant to this title.
- Presenting or causing to be presented any statement as a part of, or in support of, a claim for payment or other benefits under a policy of insurance issued pursuant to this title, if the person who presents or causes the presentation of the statement knows that the statement conceals or omits facts, or contains false or misleading information concerning any fact material to that claim.
- Assisting, abetting, soliciting or conspiring with another person to present or cause to be presented any statement to an insurer, a reinsurer, a producer, a broker or any agent thereof, if the person who assists, abets, solicits or conspires knows that the statement conceals or omits facts, or contains false or misleading information concerning any fact material to an application for the issuance of a policy of insurance pursuant to this title or a claim for payment or other benefits under such a policy.
- Acting or failing to act with the intent of defrauding or deceiving an insurer, a reinsurer, a producer, a broker or any agent thereof, to obtain a policy of insurance pursuant to this title or any proceeds or other benefits under such a policy.
- As a practitioner, an insurer or any agent thereof, acting to assist, conspire with or urge another person to commit any act or omission specified in this section through deceit, misrepresentation or other fraudulent means.
- Accepting any proceeds or other benefits under a policy of insurance issued pursuant to this title, if the person who accepts the proceeds or other benefits knows that the proceeds or other benefits are derived from any act or omission specified in this section.
- Employing a person to procure clients, patients or other persons who obtain services or benefits under a policy of insurance issued pursuant to this title for the purpose of engaging in any act or omission specified in this section, except that such insurance fraud does not include contact or communication by an insurer or an agent or representative of the insurer with a client, patient or other person if the contact or communication is made for a lawful purpose, including, without limitation, communication by an insurer with a holder of a policy of insurance issued by the insurer or with a claimant concerning the settlement of any claims against the policy.
- Participating in, aiding, abetting, conspiring to commit, soliciting another person to commit, or permitting an employee or agent to commit any act or omission specified in this section.
3Unemployment eligibility, Nevada Department of Employment, Training and Rehabilitation.
7How unemployment benefits fraud has cost Nevada millions, KNPR State of Nevada (Dec. 22, 2011).
- A court may, in addition to imposing the penalties set forth in NRS 193.130, order a person who is convicted of, or who pleads guilty, guilty but mentally ill or nolo contendere to, insurance fraud to pay:
- (a) Court costs; and
- (b) The cost of the investigation and prosecution of the insurance fraud for which the person was convicted or to which the person pleaded guilty, guilty but mentally ill or nolo contendere.
- Any money received by the Attorney General pursuant to paragraph (b) of subsection 1 must be accounted for separately and used to pay the expenses of the Fraud Control Unit for Insurance established pursuant to NRS 228.412, and is hereby authorized for expenditure for that purpose. The money in the account does not revert to the State General Fund at the end of any fiscal year and must be carried forward to the next fiscal year.
- An insurer or other organization, or any other person, subject to the jurisdiction of the Commissioner pursuant to this title shall be deemed to be a victim for the purposes of restitution in a case that involves insurance fraud or that is related to a claim of insurance fraud.