August 18, 2013

Labor Department Announces Long Island Man Sentenced for Stealing More Than $192K in Unemployment Insurance Benefits

State Department of Labor Commissioner Peter M. Rivera announced today that Paul Pappas was sentenced to 13 months in prison for stealing more than $192,000 in Unemployment Insurance benefits by the US District Court for the Southern District of New York. He was also ordered to pay back the full amount, plus fines, as restitution by August 14, 2014.

In April 2013, Pappas, of Setauket, New York, pleaded guilty to Wire Fraud following an investigation by the Department of Labor’s Major Case Unit and the U.S. Department of Labor’s Office of Inspector General.

Pappas was also given three years of federal supervision and must enter into a probation-approved mental health program.

Pappas created fictitious businesses in New York, Vermont and Florida. He then submitted false Unemployment Insurance claims in all three states using the identities of his friends and family members.

“Let this be a message to anyone who has collected Unemployment Insurance benefits to which they are not entitled: you will be caught and prosecuted,” said Commissioner Rivera. “New York State uses highly advanced technology to monitor for fraud. These systems are designed to flag suspicious activity and help ensure criminals are caught.”

New York State operates one of the largest Unemployment Insurance systems in the country. In 2012, New York State paid out nearly $7.1 billion in total benefits to 1.13 million individuals. In addition to administering the entire system, the Department of Labor is responsible for preventing and stopping fraud and ensuring the integrity of the Unemployment Insurance Trust Fund.

The Trust Fund is funded by employers across New York. When the fund is forced to pay out because of a fraudulent claim, employers have to pay more -- and that means consumers will pay more as well. It is in everyone’s best interests to stop Unemployment Insurance fraud.

New York State, a nationally recognized leader in the fight against Unemployment Insurance fraud, has identified 14,689 claimants who received more than $42 million in benefits they were not entitled to in 2013.

Anyone with information about Unemployment Insurance fraud should call the Department of Labor's toll-free fraud hotline at (888) 598-2077.

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