My husband had an agreement to work "under the table" for a Realtor while receiving unemployment benefits. My husband benefits ran out in December. This Realtor sent a 1099 reporting this income in February. My questions are: What are the penalties for committing this fraud? Would it be better to contact the EDD before we file his income tax? and finally, will they give us a chance to pay back any overpayment before there is a threat of jail?
It is impossible to predict whether EDD will cause your husband to be prosecuted. The best thing to do is contact EDD immediately and make arrangements to pay back the inappropriately-paid unemployment benefits. Your husband will have to pay a30% penalty and will be disqualified from receiving unemployment benefits for a period of time. And of course he must repay the money.
EDD's web site provides this information about fraud:
"Fraud: When you knowingly give false information or withhold information and receive benefits that you should not have received. Withholding or giving false information to obtain unemployment insurance benefits is a serious offense that can result in criminal prosecution. With a fraud overpayment, you are assessed a penalty in the amount of 30 percent of the amount of the overpayment and a false statement disqualification of 5 to 23 weeks. Fraud overpayments and penalties must be repaid."
"If you do not repay your overpayment promptly, EDD will deduct the money owed from your future weekly unemployment or state insurance benefits. This process is referred to as an offset. EDD may also:"
"Reduce or totally withhold your state income tax refunds, lottery winnings, or any other money owed to you by the state."
"File a claim against you in court, charge you court costs and interest, and record a lien on your property."
See additional information here: http://www.edd.ca.gov/unemployment/Overpayments.htm
*** All legal actions have time limits, called statutes of limitation. If you miss the deadline for filing your claim, you will lose the opportunity to pursue your case. Please consult with an experienced employment attorney as soon as possible to better preserve your rights. *** Marilynn Mika Spencer provides information on Avvo as a service to the public, primarily when general information may be of assistance. Avvo is not an appropriate forum for an in-depth response or a detailed analysis. These comments are for information only and should not be considered legal advice. Legal advice must pertain to specific, detailed facts. No attorney-client relationship is created based on this information exchange. *** Marilynn Mika Spencer is licensed to practice law before all state and federal courts in California, and can appear before administrative agencies throughout the country. She is eligible to represent clients in other states on a pro hac vice basis. ***
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