Yes you can be prosecuted for fraud, even if you make arrangements to repay the money. That's because paying back the money doesn't make the illegal act go away and it's always in the government's interest to discourage benefits fraud. The matter will almost certainly be turned over to the DAs Office, and it would be up to them
to determine whether or not to prosecute you.
The standard for an arrest and a prosecution only requires probable cause
-- a reasonable belief that a crime may have been committed and that a particular person might have committed it. A conviction is something else again, as a conviction requires proof of guilt beyond a reasonable doubt, but what you did would be enough to make out probable cause. If it's specifically noted on the application that you must declare unemployment insurance payments as income and you did not do that and thus received benefits that you would not be entitled to if you'd filled out the application correctly, this could reasonably make someone think that the mistake was deliberate dishonesty. That's probable cause in a nutshell.
That's the bad news. The good news is that this would be a state jail felony in Texas and would be one for which probation would be available. In my experience while the state does want a defendant to be sanctioned for what they've done, what they want most is their money back, and what they'd want least, is to have to lose more money paying for this person to stay in jail. So the standard offer on a benefits fraud case, assuming you have no prior felony convictions, is almost always no worse than a probation offer, with restitution (the paying back of the money). These days, it's even possible (though I can't say how likely) for a defendant to also get a deferred adjudication with probation. That would allow you, if you completed your probation successfully, to apply for non disclosure and thus not to have to carry the stigma of a felony conviction around with you.
Wait for the call to come. Don't be proactive by calling them before you have to because it won't change a thing. Meanwhile take the time to find yourself a local criminal lawyer. You don't have to retain him yet, but you might want to sit down and consult with one, because the second you are contacted about this, you are going to have important decisions to make about hearings and waivers, and paybacks and the like. You don't want to make any appointments or admissions without first letting a lawyer know exactly what you were told by the state and having him explain exactly what all of your rights are. You are going to have to pay this money back one way or the other, and a defense of mistake to the criminal charge is probably not going to be a winner if it's stipulated on the application that you must declare unemployment as income. But that doesn't mean you want to make a bigger mess for yourself than you need to. So having a lawyer lined up is a good thing. You can get a low priced ($50 or less) referral for a half hour consultation with a member of the Texas criminal bar in good standing by contacting the Texas bar association's Lawyer Referral Service
. You would not have to retain the lawyer until you needed him, and then, only if you wanted to, but you'd at least know youd have someone at hand familiar with your case that you could reach out to quickly.
Edited by FranL on 9/4/2010 at 2:54 AM EST