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Brandon, Esq.
Brandon, Esq., Lawyer
Category: California Employment Law
Satisfied Customers: 1830
Experience:  Has received a certificate of recognition from the California State Senate for his outstanding legal service.
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I might have committed fraud receiving benefit while working.

Resolved Question:

I might have committed fraud receiving benefit while working. EDD is about to find out, should I call them and tell them the whole story now? I can borrow money and pay them back but I really can't afford to get prosecuted. Should I find an attorney now?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Brandon, Esq. replied 1 year ago.

Employment-LawExpert :

Hello and thank you for your question today

Employment-LawExpert :

Are you online with me?

Employment-LawExpert :

Welcome to the chat

Customer:

yes

Employment-LawExpert :

The short answer is that you should absolutely call them and tell them the whole story now. EDD has the power to charge you a considerable penalty, and even charge you with fraud. However, to be able to do this you must have intentionally tried to defraud them. If you call them up first, usually you will get away with just having to repay what you were overpaid.

Employment-LawExpert :

What exactly were the facts of your receiving benefits? Did you willing ask for benefits while you were working?

Customer:

Yes, I did. I used my friend's company invoice the company I worked for and claim benefit the same time.

Customer:

i thought they never find out.

Customer:

but someone in the company i worked for decided to tell EDD,

Employment-LawExpert :

Unless you are being paid in cash, and the employer is evading tax liability, the EDD always finds out

Employment-LawExpert :

The reality of it is that in a situation like this an attorney won't be much help to you. Regardless of what an attorney can do for you, they will not be able to prevent the EDD from being able to collect any over payments.

Employment-LawExpert :

When you say you used your friend's company invoice, what do you mean by that?

Customer:

i ask A company to billed the company i worked for and when they got paid, they paid me cash.

Customer:

i really don't want to involve A company more, so I need to be very careful

Employment-LawExpert :

That does get a bit trickier. So under the facts you mention you were actively trying to collect both and were doing so with knowledge of being able to sidestep edd correct?

Customer:

yes, i admit to that. I shoot myself now for doing it.

Customer:

i know it's a crime....

Employment-LawExpert :

The law states that "If you collect more UI benefits than you are eligible for because you fail to report earnings, you may be committing fraud and may be prosecuted." While you should absolutely contact EDD first you need to be very careful about what you tell them.

Employment-LawExpert :

Generally, they tend to forgive people who try to rectify the problem themselves. If they find out about it before you tell them, then you are definitely looking at repaying the ui benefits collected, plus penalties and fines.

Customer:

the EDD rep seems nice when i talk to her, but i did lied when she asked if I know A company. I not sure if she will let me just pay everything back without prosecute me if i admit to her now.

Employment-LawExpert :

That being said, if they believe that the over payment was as a result of a mistake, then you would only have to repay the benefit with a 30% penalty.

Employment-LawExpert :

So you already lied to the EDD?

Customer:

i did, i told them I don't know A company when they asked me. I was shocked and couldn't think much...

Employment-LawExpert :

What paper connection do you have with company A?

Customer:

i signed an agreement for getting paid $3000 a month under my name, and later billed them under A company name. the company I worked for gave EDD all those paperworks.

Customer:

so my agreement, A company's W9 and 4 invoices from A company

Employment-LawExpert :

That changes things greatly. Usually, if you had a legitimate argument that you just discovered a discrepancy then honesty is always the best policy as it will almost never result in fraud charges and sometimes will not even result in a penalty. However, in your situation, you have actively committed fraud which can be proven through documentation. You definitely may want to consider getting an attorney involved at this point and you definitely want to repay the amount as soon as possible. By having an intermediary (the attorney) discuss this with the EDD rep you will not have to go back on what you previously said, and thus you would not be admitting to lieing to them directly. If you decide to hire an attorney, a great resource is www.Martindale.com. This is a nationwide directory that is useful in finding highly qualified legal specialists in various fields of law. THe lawyers in Martindale are not selected because they paid to be included, but rather because they have been rated by other attorneys as qualified experts in their field.

Employment-LawExpert :

You should consider consulting with two or three different attorneys prior to selecting the one you feel most comfortable with. The real issue here is that they need to feel that you are an honest person. Had you not lied to her directly, you would not need an attorney. Because you did, you have to be very careful how you proceed from here.

Employment-LawExpert :

You have very clearly told them now that this is not just a legitimate mistake but that you were actively trying to hide the existence of this company and this agreement.

Employment-LawExpert :

No matter what you do, you will have to repay the overpayment and likely the 30% penalty. You just want to make sure that this is the maximum that ends up happening.

Employment-LawExpert :

So, you have 2 options at this point 1) Call back and say, oh I am terribly sorry I do remember this company (but you are running a risk) or 2) get an attorney involved so that you do not end up actually perjuring yourself to them.

Customer:

ok, so don't call the EDD rep back now? She seems like a nice lady I can ask for forgiveness, or maybe it's not up to her....

Employment-LawExpert :

it is completely up to her.

Employment-LawExpert :

the problem is, if she believes that the over payment was caused by untruthfulness, then you could end up in serious trouble.

Customer:

so the edd rep can skip some detail on her report?

Employment-LawExpert :

What do you mean skip some detail?

Customer:

like the conversation between she and me, can she skip some.

Employment-LawExpert :

She has already documented your last conversation. She will not go back into the computer to change that.

Employment-LawExpert :

However, what she documents in a particular conversation is up to her

Employment-LawExpert :

so if she called twenty minutes ago, that is one thing

Employment-LawExpert :

but if she called yesterday, that is something else

Customer:

this morning, and she's getting ready to final it

Employment-LawExpert :

how long ago this morning? more than 2 hours ago?

Customer:

i just had my eye surgery 2 days ago, that makes thing all much worst.

Customer:

yes, 4 hours

Customer:

so don't try to make up more story like - A company didn't pay me, i'm just helping them up giving them business with company i worked for.

Customer:

i'm afraid that will involve A company more for audit

Employment-LawExpert :

Unfortunately, I cannot create an attorney client relationship with you so I cannot tell you definitively what to do here. I can tell you that if you believe you can convince her that you made a mistake then calling her is a good idea. However, you do not want to call her and say, yeah, I was trying to defraud the EDD. Is there any legitimate argument you can think of that would not show you defrauding the EDD? Making up more story goes towards you being untruthful if it is disproven. You need to look at what can be proved. From what you have said, it sounds like there are documents linking you to payment which the EDD likely already has

Employment-LawExpert :

If company A is not willing to back up that story, it is a bad idea

Customer:

ok, i understand. they will hep me in anyway they can, they just afraid being audit by EDD or even IRS.

Employment-LawExpert :

The problem you have is, you said "I have never heard of this company." So, now you would be saying Oh, wait, I have heard of this company, so much so, that I want to help them out. Do you see how this could lead to you being untruthful?

Employment-LawExpert :

and potential fraud charges being filed?

Customer:

going to tell her that I was so nervous so I didn't tell the truth, i help A company to get business to exchange for some benefit, I know I shouldn't have claim and willing to give it all back.

Customer:

please give me a chance.....

Customer:

begging

Employment-LawExpert :

I cannot advise you one way or another on that. All I can tell you is that you are definitely throwing yourself on the mercy of this person as you are basically admitting to fraud. If she is as nice as you mention then you will probably be fine. However, if she is not, then you are blatantly admitting fault

Customer:

ok, it's all up to her i see. I have called few lawyers locally but none answered or called me back. i guess I have no other choices.

Customer:

my eye condition doesn't allow me to travel

Employment-LawExpert :

You can definitely consider calling a few more before you call, but that is entirely up to you. www.Martindale.com is a great resource, and if you call the first 10 attorneys in your area it is likely that one will pick up.

Customer:

how to i search for local employment attorneys

Employment-LawExpert :

in the search bar you would type the county or town in which you live and the words employment law

Employment-LawExpert :

then on the left side you can narrow the search down further with their many options.

Customer:

ok got it

Customer:

thanks

Customer:

do they give advice over the phone or I have to go their office, it seems too late.

Employment-LawExpert :

They will likely give a free consultation over the phone. Many may even be willing to take your case without every actually meeting you face to face

Employment-LawExpert :

They will fax you or email you a retainer which you will have to sign and send back to them

Customer:

ok thanks for all your help

Employment-LawExpert :

I am glad that I could get you pointed in the right direction. Have I fully answered your question today? Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

Customer:

that's it, i will decide next 5 mins to call Edd rep or this attorney since i'm out of time and she's getting ready to final it.

Employment-LawExpert :

Again, that is completely up to you. I wish you the best of luck with whatever you decide. Before you go, please do not forget to provide a rating in the middle or above as this is the only way I will receive credit for assisting you.

Customer:

ok thanks again

Brandon, Esq., Lawyer
Satisfied Customers: 1830
Experience: Has received a certificate of recognition from the California State Senate for his outstanding legal service.
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