From the Bridge – the Center for Michigan

February 7, 2917

A few days after a federal judge issued a Jan. 11 order commanding the state to “suspend all collection activity” against thousands of Michigan workers tagged with unemployment fraud, Jason Doss checked his bank account.

It was business as usual.

Michigan’s Unemployment Insurance Agency, as it has for nearly two years, was still taking one fourth of his Ford Motor Co. paycheck citing unemployment fraud. It seized $212.57 on Jan. 17. It took $196.91 the following week. It claimed yet another $196.36 last week, on Feb. 3 — a day after the state settled a federal lawsuit by agreeing to sweeping reforms of the agency’s error-filled fraud identification system.

To date, UIA has taken more than $14,000 from Doss’ checks. And the settlement notwithstanding, the agency says he still owes nearly $70,000, which includes a penalty of more than $62,000 and over $7,000 in interest. Doss is among a flood of workers who insist they were incorrectly accused of fraud by a rogue state computer, never told the precise nature of what they had done wrong, and were never given a chance to defend their actions before their paychecks were garnished. An internal state review of more than 20,000 fraud claims showed a 93 percent computer error rate.

Doss, 37, a soft-spoken suburban Detroit resident who keeps meticulous records of every penny the state has taken, tries to curtail his rage every time he looks at the money taken from his checks.

“If I dwell on it, I could go crazy. It’s like being robbed,” Doss said, seated at his dining room table, scanning a printout of every check the state has taken.

“If I dwell on it, I could go crazy. It’s like being robbed.” — Jason Doss, a Detroit-area worker who said he was wrongly accused of fraud

Doss is one of four Michigan workers ensnared in the state’s unemployment benefits fraud debacle who agreed to talk to Bridge Magazine about the toll it has taken on their lives. A suburban Detroit woman declared bankruptcy. An Eaton County resident fell behind in his bills. A Washtenaw County electrician recounted his wife crying before Christmas after he was told he owed the state $13,000.

Doss said he has a bit more hope he might finally win back his money following last week’s announced settlement of a federal  lawsuit that accused the unemployment agency of saddling thousands of workers with bogus fraud charges, cases UIA says it’s now willing to review and, if warranted, reverse.

But even that announcement would not end the anxiety felt by workers unfairly targeted. In a bizarre coda to the computer saga, the state reported Friday that a software glitch may have allowed some users of the Michigan Integrated Data Automated System — or MiDAS — to access the names and Social Security numbers of nearly 1.9 million workers whose payroll was processed by third-party vendors. That’s nearly 40 percent of the state workforce.

UIA spokesman Dave Murray said the data breach and the UIA fraud mess, both tied to Colorado-based firm Fast Enterprises, are “very, very different issues.”

“Our No. 1 focus at the UIA is serving Michigan residents,” he said.

The federal lawsuit settlement binds UIA to an earlier agreement that the state would review each fraud case generated by the computer — impacting some 40,000 workers — and ensure workers get appropriate notice of the accusations and an opportunity to respond before the state starts collection efforts.

The deal also ends the state’s heavily criticized practice of “income spreading,” in which claimants’ occasional work earnings were treated by the computer system as having been earned across an entire quarter. Attorneys say the practice led the state to falsely conclude some workers were illegally getting paychecks during periods when they were also collecting unemployment insurance.

For its part, the state agency is now acknowledging the potential scope of the damage. An agency internal review in December found that nearly 21,000 workers – 93 percent of the cases reviewed – had been falsely accused of fraud over a 22-month period.

David Blanchard, lead attorney for the lawsuit, said he is “heartened by new leadership who finally acknowledge the problem and recognize that this settlement is this first step, but not the last step, of essential reform to the UIA.”

“We’re glad to bring this matter to a close,” said Wanda M. Stokes, director of the Talent Investment Agency, which oversees the UIA, in a statement after the suit was settled. Stokes, named to the post last July, recently told the Associated Press she was angered by the agency’s failures and that damage done to workers “shouldn’t have happened.”

Royal Oak attorney Jennifer Lord, who leads a separate lawsuit seeking class-action status in state court against UIA, called the agreement “an important and positive first step forward.” That lawsuit seeks recovery of garnished wages, penalties and interest as well as other monetary damage caused by false fraud findings.

But Lord said there remain “many outstanding issues,” including ongoing garnishments of workers’ paychecks, like those cited by Doss, and the state’s failure to account for money that may have been wrongly seized from workers in 2016.

“Government by spreadsheet does not work,” Lord said.  .

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