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I. UIC 2101: Unemployment Insurance Fraud (EDD Fraud)

Legal Definition: UIC 2101: “(a) It is a violation of this chapter to willfully make a false statement or representation, to knowingly fail to disclose a material fact, or to use a false name, false social security number or other false identification to obtain, increase, reduce, or defeat any benefit or payment, whether for the maker or for any other person, under any of the following statutes administered by the department:

(1) The provisions of this division.

(2) The provisions of any unemployment insurance law of the federal government.

(3) The provisions of any training allowance law of the federal government.

(4) The provisions of any trade readjustment allowance law of the federal government.

(5) The provisions of any other allowance law of the federal government.

(b) Nothing in this section shall be construed to preclude the applicability of Section 470 of the Penal Code to any acts or omissions which violate this section.

II. What does this mean?

This crime penalizes people who apply for unemployment by supplying false or misleading documents to the Government to obtain benefits. For the employer, they can be penalized for supplying false information so that a current or former worker of theirs will be denied a benefit that they are entitled to.

Based on the Covid-19 Pandemic, California has seen an increase in the number of people applying for unemployment benefits to the Government. Most notably, in California, over 31 billion dollars were taken by people in custody, who were not entitled to receive any kind of benefit. That is because if you are applying for unemployment assistance, it may be shown that you:

  1. Were unemployed, even if you are about to be laid off and have the last day, you cannot apply until you officially do not have a job anymore. If you had your hours involuntarily reduce to less than full time, this counts under this section as well;
  2. You are actively looking for work;
  3. You are ready and physically able to work immediately, and
  4. You have worked for the last 18 months.

Clearly, a person in custody for a crime is not ready and physically able to work, since they are in jail. Therefore, they are not eligible for EDD benefits. However, that has not stopped an increasingly high number of in-custody individuals applying, which has caused the biggest EDD Fraud scandal in history.

It’s also important to note, that people who participate in or assist those to commit EDD fraud can be liable and charged under this section. This can be true, even if you never receive the aid, or are not able to withdraw the funds, it doesn’t change your case. That is because this section penalizes people who attempt to commit fraud, whether they are successful or not. That is because all that is needed to be found guilty under this section is that you (1) Intended to defraud and (2) you made a false statement that must have been used for the purpose of perpetuating the fraud. In this case, you would also likely be liable for a form of Conspiracy (link to that page), since it was an agreement between two or more parties to commit fraud.

III. Penalties

A violation under UIC 2101 is a wobbler offense in California, which means you can be charged with this crime as a misdemeanor or as a felony offense. Whether you are charged with this section as a misdemeanor or a felony charge, depends on the specific facts of your case, the amount of the loss, and your criminal history. If convicted of this charge as a misdemeanor, you could be sentenced to up to one year in County Jail. If you are charged under this section as a felony (most common), you could be sentenced to up to 16 months, 2, or 3 years in a State Prison. You would have to serve at least 50% of that time in custody. You could also face fines up to $20,000, in addition to any Restitution sought.

This is not a strike offense under the California Three Strikes law, and it is not a Sex Offense under PC 290. You could also face a loss of your Professional License if convicted, and if you are not a legal resident, you could face Deportation in Immigration Court since this is a crime involving theft, which makes it a “bad thoughts” crime, also known as a crime of moral turpitude.

IV. Common Defenses

  1. Statute of Limitations
  2. Violation of Rights
  3. Insufficient Evidence
  4. Coerced Confessions

One way to defend against this charge, in using the above example of assisting an incarcerated inmate to obtain this fraud, is what if you did not know you were committing fraud? What if, for example, an inmate who is a friend, asks you to assist in delivering their mail to a 3rd party. Within that mail, is paperwork for EDD. You do so as a friendly gesture. Unknown to you, that 3rd party was assisting the in custody individual commit EDD fraud. But, you didn’t know what was in the mail, or that you were assisting in the fraud by passing it on to a 3rd person. Here, you would be able to argue that there is no Conspiracy since you did not know that you were helping to facilitate this fraud, and in addition to that, you were not yourself committing fraud since you did not know the purpose of passing on the mail to that 3rd party. Failing to show that you had the specific intent to defraud, would mean that there is insufficient evidence to prove you guilty of EDD fraud under this section.

Another possible defense is that you may have confessed to assisting someone in EDD Fraud, but you did so by being coerced by police to confess to the crime. Maybe you were the person in the above example that did not know what the in custody friend was doing, but based on overzealous police work, you are corned and confess that you actually did know, and you get charged. Generally speaking, a person who confesses to a crime forced out of them by police conduct, would be inadmissible to be used against them in Court. This makes logical sense, if the police force a confession out of a person illegally, it should not be able to be brought into Court to be used against them. Generally, this can happen during police interrogations where police, believing they have their person, do whatever it takes you to make you confess. They can do this through physical abuse or psychological abuse. Police can lie to you. If your Ontario Criminal Defense Attorney can establish that your confession was coerced by overbearing police work, then your confession can be suppressed, and the case against you would likely be dismissed.

V. Call Today

A conviction under this section can have a devastating aspect on your livelihood. You are likely looking at custody time, loss of freedom, gigantic fines, and a criminal record. Given the amount of fraud that has happened with the Covid-19 Pandemic, Prosecutors are out for blood on these charges, and will zealously advocate for long custody time and fines, to recoup what the state has lost. Our Ontario EDD Fraud attorneys have successfully defended thousands of people in Ontario and throughout Southern California in theft cases including Unemployment Insurance Fraud. Call your local Ontario Criminal Defense Attorney today at the Inland Empire Defense 909-939-7126. Located in Ontario.

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