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Prison with benefits: WI inmates collect $600,000 in unemployment

By   /   July 11, 2013  /   News  /   2 Comments

By M.D. Kittle | Wisconsin Reporter

MADISON — Who says you can’t collect unemployment in prison?

The law.

But that didn’t stop hundreds of inmates from cashing in on hundreds of thousands of dollars in illegal unemployment payments, according to information obtained by Wisconsin Reporter through an open records request.

There were 593 cases of “overpayments,” or jobless benefits paid in the names of Wisconsin prisoners between July 2012 and this month — to the tune of $616,248, according to state Department of Workforce Development records.

Crime Pays? 593 inmates collected $616,000 in unemployment over the last year, according to the Department of Workforce Development.

Crime Pays? 593 inmates collected a total of $616,000 in unemployment benefits over the last year, according to the Department of Workforce Development.

That’s more than double the amount uncovered in an audit in 2011, which found the Unemployment Insurance Division paid out $291,248 to inmates, according to DWD spokesman John Dipko.

Data obtained by Wisconsin Reporter in July 2012 found 406 inmates scammed unemployment benefits from July 2011 to July 2012.

Dipko said the numbers are rising because of collaboration between agencies in targeting fraud.

“We believe the primary reason is we are getting better at tracking down cases through our aggressive approach, stronger relationships with correctional officials, and more effective use of the tools at our disposal to track down cases,” he said in a follow-up email to Wisconsin Reporter.

Dipko added that the latest numbers also may cover a slightly longer period.

Unemployment compensation programs are administered by the states and funded by payroll taxes that employers pay.

The Unemployment Insurance Division uses an inmate cross match system initiated in 2011 to match records with Social Security Administration records for incarceration.

“The monthly run helps identify individuals who were collecting UI (Unemployment Insurance) benefits while incarcerated,” Dipko said. “While the information obtained via this cross match is about three months old, it provides the opportunity for recovery of benefits that were wrongfully claimed.”

Dipko said DWD receives alerts from officials who become aware of inmates receiving UI benefits. It’s part of an ongoing approach that includes “actively monitoring” media reports of criminal activity to determine whether the subjects are filing for unemployment benefits and, if so, “immediately suspending payments and investigating.”

But the system isn’t fraud proof.

Gov. Scott Walker recently signed into law Act 36, which is supposed to strengthen the Unemployment Insurance Division’s ability to hold all UI claimants accountable for sharing their PIN information in fraud cases. Unemployment officials say much of the fraud is committed when a family member or friend reports an unemployment claim on behalf of the convict. Pocketing unemployment on behalf of an inmate is a legal no-no.

“Should an inmate share his or her PIN with a spouse, significant other, mother or other family member or friend while incarcerated and fraud occurs, we will be able to hold the inmate responsible for the overpayment,” Dipko said of the new law. “That is a change from current law and should continue to support our fraud detection and recovery efforts.”

The Unemployment Insurance Division also has added 10 investigators, compared to one under Gov. Jim Doyle’s administration, to “aggressively pursue and recover overpayments and fraudulent claims,” Dipko said.

With more resources and sharper teeth in laws devoted to going after unemployment fraud, it begs the question: Was there more fraud out there that had gone undetected? Is there more fraud than is being reported? The answer appears to be, probably.

Dipko could not provide recovery figures for unemployment benefits paid to inmates, but he noted the Unemployment Insurance Bureau of Tax and Accounting collected more than $25.2 million in fraudulent overpayments  and more than $24.9 million in non-fraud overpayments (mistakes made by UI or glitches in the system) in 2012.

The UI division attempts to recover fraud and other overpayments through levies, warrants and tax-refund intercepts.

There are instances in which inmates could be eligible for unemployment benefits. Inmates held at county jails for a short time such as 48-hour holds, or who are permitted to leave jail and look for work and are considered able and available to work, could legally be eligible for Unemployment Insurance, if they are unemployed, Dipko said.

State Rep. Samantha Kerkman, R-Randall, co-chair of the Joint Legislative Audit Committee, said the increased level of overpayments to inmates underscores the importance of agencies cross-checking beneficiaries of public assistance programs.

“I think this is a great start but we can always be more vigilant,” she said, noting proposed legislation and calls for bills to boost cross-referencing. “This is critical in saving taxpayers money.”

Contact M.D. Kittle at [email protected]


M.D. Kittle is bureau chief of Wisconsin Watchdog and First Amendment Reporter for Watchdog.org. Kittle is a 25-year veteran of print, broadcast and online media. He is the recipient of several awards for journalism excellence from The Associated Press, Inland Press, the Wisconsin Broadcasters Association, and others. He is also a member of Investigative Reporters & Editors. Kittle's extensive series on Wisconsin's unconstitutional John Doe investigations was the basis of a 2014 documentary on Glenn Beck's TheBlaze. His work has been featured in Town Hall, Fox News, NewsMax, and other national publications, and his reporting has been cited by news outlets nationwide. Kittle is a fill-in talk show host on the Jay Weber Show and the Vicki McKenna Show in Milwaukee and Madison.

  • jacklohman

    Stupid me. I thought you had to be “available to work” in order to collect unemployment benefits. The state should now, in turn, charge those who wrongfully collected, RENT (or fraud!).

  • barbbie

    Shame on you, Jack. Since when did anyone have to tell the truth about collecting any BENEFITS. How would this ever be recovered??? Those who commit fraud are never held accountable…they are just slapped on the hands, How does blaming Governor Walker help this situation?