State apologizes for fraud fiasco, wants to reduce penalties

Jan 28, 2017

A state official who is conducting a wide-ranging review of Michigan's embattled unemployment benefits office apologized for the fiasco that led at least 20,000 people to be falsely accused of defrauding a system that provides the jobless with temporary financial assistance.

LANSING, Mich. (AP) — Talent Investment Agency Director Wanda Stokes, whose agency includes the stateUnemployment Insurance Agency, added that lawmakers should consider reducing what she said are the country's highest financial penalties for unemployment fraud. "I really feel horrible about this whole situation," she told The Associated Press in an interview Friday.   "At the most vulnerable and stressful time in their life, they are now being accused of fraud. ... I understand that they're angry and I'm angry, too.   It shouldn't have happened." Stokes, who took charge of the umbrella agency that oversees the unemployment office in July, said Republican Gov. Rick Snyder appointed her to "assess the situation and then fix it." The state is reviewing about 50,000 cases from a nearly two-year period that cover roughly 40,000 people who were determined to have committed fraud — either solely by an automated computer system or by a mix of the software and some level of staff involvement.   That typically means they were flagged for receiving "overpayments" to which they had not been entitled.