Unemployment Compensation Review Commission
Chapter Ten

Overpayment and Fraudulent Misrepresentation

A.    Overpayment Where There is No Fraudulent Misrepresentation

  1. If the Director finds that an applicant for benefits has been credited with a waiting period or paid benefits to which the applicant was not entitled, for reasons OTHER than fraudulent misrepresentation, the Director shall cancel such waiting period and require that such benefits be repaid to the Agency, or be withheld from any benefits to which such applicant is or may become entitled before any additional benefits are paid. {ORC §4141.35(B)(1)(a)}
     
    1. However, the Director shall NOT cancel such waiting period and require that such benefits be repaid or withheld IF the overpayment is the result of the Director's correcting a prior decision due to a typographical or clerical error in the Director's prior decision, OR an error in an employer's report, under Ohio Revised Code Section 4141.28(G).
       
    2. Further, the Director shall cancel such waiting period and require that such benefits be repaid or withheld ONLY within six months after the determination under which the claimant was paid benefits becomes final, OR within three years after the end of the benefit year in which such benefits were claimed, whichever is LATER.
       
      1. This limitation does NOT apply to cases involving the retroactive payment of remuneration covering periods for which benefits were previously paid to the claimant. {ORC §4141.35(B)(1)(b)}
         
      2. However, the Director shall NOT cancel such waiting period and require that such benefits be repaid or withheld UNLESS the Director is notified of the retroactive payment within six months of the date the retroactive payment was made to the claimant. {ORC §4141.35(B)(1)(b)}
         
  2. Collection of Overpayment.
     
    1. Beginning in 2006, overpayments not paid in full within forty-five days of a decision becoming final may be referred to Ohio's Attorney General for further collection efforts.
       
    2. Any outstanding balances not repaid or recovered through collection efforts will be recovered by the withholding of any future benefits to which claimant is or may become entitled.
       
    3. If the amount of the repayment is not recovered within three years from the date the Director's order requiring repayment became final, the Director shall initiate no further action to collect such benefits AND the amount of any benefits not recovered at that time shall be canceled as uncollectible. {ORC §4141.35(B)(3)}
       

B. Fraudulent Misrepresentation

  1. If the Director finds that any fraudulent misrepresentation has been made by an individual with the object of obtaining benefits to which the individual was not entitled, the Director:
     
    1. Shall, within four years after the end of the benefit year in which the fraudulent misrepresentation was made, cancel the individual's weekly claim for benefits that was fraudulently claimed, OR the individual's entire benefit rights if the misrepresentation was in connection with the individual's application for determination of benefit rights. {ORC §4141.35(A)(1)}
       
    2. Shall order that, for each application and weekly claim canceled, the individual shall be ineligible for two otherwise valid weekly claims that are claimed within the six years following the discovery of the misrepresentation. {ORC §4141.35(A)(2)}
       
    3. Shall order that the total amount of such benefits be repaid to the Agency, or be withheld from future benefits accruing and otherwise payable, before the individual may become eligible for further benefits. {ORC §4141.35(A)(3)}
       
      1. If the overpayment is a result of fraudulent misrepresentation and not repaid within thirty days, interest on the outstanding balance will accrue at an annual rate of fourteen percent, compunded monthly. When all overpaid benefits are repaid according to an approved repayment plan, the Director may cancel interest accrued during the period of the repayment plan.
         
      2. Beginning in 2006, overpayments not paid in full within forty-five days of a decision becoming final may be referred to Ohio's Attorney General for further collection efforts.
         
      3. In addition, the Director may institute attachment or garnishment proceedings to recover fraudulent overpayments, as well as subsequent charges and court costs.
         
      4. Any outstanding balances not repaid or recovered through collection efforts will be recovered by the withholding of any future benefits to which claimant is or may become entitled.
         
      5. If the amount of the repayment is not recovered within six years from the date the Director's order requiring repayment became final, the Director shall initiate no further action to collect such benefits AND the amount of any benefits not recovered at that time shall be canceled as uncollectible. {ORC §4141.35(A)(3)}
         
    4. Effective Sept. 5, 2005, ORC 4141.29(D)(2) no longer provides for a suspension of benefits for fraudulent misrepresentation.
       
  2. The essential elements of fraud are set forth in Friedland v. Lipman (1980), 68 Ohio App.2d 255. This standard was specifically applied to an unemployment case in Diliberto v. Administrator, 1989 Ohio App. LEXIS 2859.
     
    1. A representation, or where there is a duty to disclose, concealment of fact;
       
    2. Which is material to the transaction at hand;
       
    3. Made falsely with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred;
       
    4. With intent of misleading another into relying upon it;
       
    5. Justifiable reliance upon the representation or concealment; AND
       
    6. A resultant injury proximately caused by the reliance.
       
  3. The intent to commit fraud may be inferred from intrinsic or extrinsic evidence, as well as from the surrounding circumstances. See Nichols v. OBES, 1987 Ohio App. LEXIS 914.
     
    1. An individual will be held to intend the ordinary and probable consequences of the individual's acts. Kurtz v. Giles (Feb. 2, 1979), Montgomery CP No. 77-1187, unreported.
       
    2. An individual's mere denial of fraudulent intent is not conclusive if the circumstances of the case show otherwise. Kurtz v. Giles (Feb. 2, 1979), Montgomery CP No. 77-1187, unreported.
       
    3. However, an individual's simple negligence in failing to exercise due care in ascertaining the truth of the representation at issue does not support an inference that the individual knew that the representation was false at the time it was made. Crupa v. Board of Review (July 25, 1986), Cuyahoga CP No. 102588, unreported.
       
    4. Further, an individual's reliance upon a state employee's mistaken advice about the law does not support an inference that the individual knew that the representation was false at the time it was made. Nutting v. Ford Motor Co., 1979 Ohio App. LEXIS 10549; Carroll v. Giles, 1978 Ohio App. LEXIS 8873; England v. Board of Review (Mar. 14, 1978), Franklin CP No. 77CV-10-4196, unreported.
       
  4. Although not an all-inclusive list, fraudulent misrepresentation cases generally involve one of the following questions every claimant is required to answer on every claim card:
     
    1. whether the claimant was "able, available and seeking work as instructed." See, e.g., Johnson v. Administrator (May 14, 1998), Cuyahoga App. No. 73591, unreported (holding that a claimant made a fraudulent misrepresentation that he was able to work as a truck driver when medical documentation showed that he was totally disabled from working as a truck driver).
       
    2. "during the week claimed, did you refuse work, quit, or were you discharged from a job?" See, e.g., Townsend v. Board of Review, 1989 Ohio App. LEXIS 1173, (holding that a claimant made a fraudulent misrepresentation that she did not refuse work when she had failed to report to work after agreeing to an assignment with a temporary help agency. The suitability of the refused work, or the reason for the refusal, are not relevant to this inquiry, as the only issue is whether the claimant failed to report a refusal of work).
       
    3. "did you work, or were you self-employed, during the week claimed?" See, e.g., Administrator v. Veres, 1986 Ohio App. LEXIS 5982, (holding that a claimant made a fraudulent misrepresentation that he was not self-employed when he was working up to sixty-four hours per week at a tavern he owned); May v. Board of Review, 1980 Ohio App. LEXIS 14138, (holding that a claimant made a fraudulent misrepresentation that he was not self-employed when he was working up to forty hours per week, even though his expenses exceeded his income).