UIA Fraud Class-Action Continues to Gain Steam

In September 2015, firm attorneys filed a class-action lawsuit against the State of Michigan Unemployment Insurance Agency (UIA). The complaint alleges that the automated system used for adjudicating unemployment insurance fraud, falsely accused as many as 46,000 innocent claimants of fraud. Claimants were then slapped with quadruple penalties, interest on a debt they did not owe, and subjected to aggressive collection practices including the seizure of tax refunds and 25% wage garnishments. The lawsuit, as well as intensive reporting by multiple news organizations, and support from state and federal lawmakers, has begun to force changes within the UIA. Earlier this year the head of the Agency was removed and replaced. The UIA has started the process of issuing refunds to some of the wrongly accused victims. But the fight is far from over. Firm attorneys estimate that the total amount due to claimants exceeds $500 million dollars. To date, the agency has refunded less than $6 million. Recent reports of an internal memorandum from the UIA's former Chief Financial Officer to Governor Snyder demonstrate that the problems within the agency and financial irregularities were rampant and ignored by UIA leadership. The firm secured a significant victory when Judge Cynthia Stephens rejected the UIA's attempt to dismiss the lawsuit. Despite the win, and despite the UIA's admissions that it wrongly accused 93% of the fraud victims, the UIA continued to defend the indefensible by appealing the trial court's decision. The Michigan Court of Appeals will be scheduling oral argument in the case soon. In the meantime, firm attorneys filed another class action to force the agency to comply with a separate federal court order to stop collections until each wrongly accused claimant's file is reviewed and the worker is given a chance to demonstrate that they did not commit fraud. The suit also seeks to prohibit the State of Michigan from using the money wrongly collected from workers for other spending projects. To date, the state has removed $10 million dollars from the dedicated fund that holds money improperly seized from claimants. The State Legislature has recently introduced legislation to snatch tens of millions more from the fund. "The State needs to keep their hands off that fund," said firm attorney Jennifer Lord. "That money belongs to victims of this nightmare. It is not the state's personal piggy bank. We will continue to build our case and work to ensure that every victim is fully compensated." Additional information at UIAFraudClassAction.com.