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Suit Filed Against State Fraud Detection Vendor: Paul Egan
Suit Filed Against State Fraud Detection Vendor: Paul Egan
Suit Filed Against State Fraud Detection Vendor: Paul Egan
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LANSING A proposed class-action lawsuit was filed in Detroit Thursday against the
Colorado company that supplied the state's Unemployment Insurance Agency with the automated
detection system used to falsely accused tens of thousands of Michigan claimants of committing
fraud.
Detroit attorney Jonathan Marko filed the suit on behalf of three named plaintiffs who allege they
were falsely accused of fraud, along with "thousands of Michigan unemployment insurance
claimants like them" eligible claimants determined to have committed fraud "without any
factual basis."
The suit names three defendants, including Fast Enterprises of Colorado, which sold the state the
$47-million Michigan Integrated Data Automated System (MiDAS). State officials have said it
had a 93% error rate in detecting unemployment insurance fraud, resulting in more than 20,000
claimants being falsely accused and subjected to quadruple penalties, in many cases having their
income tax refunds seized and wages garnished.
Related:
A call Thursday to Fast Enterprises was directed to company official James Harrison, who did
not respond to telephone or e-mail messages.
The suit also names two other state vendors: SAS Analytics of North Carolina and CSG
Government Solutions of Chicago, alleging they were also involved in jobless agency fraud
detection efforts.
"It's going to take further discovery through the litigation process to pin down who exactly did
what when," Marko told the Free Press.
The state and the UI Agency are not named as defendants in the lawsuit.
Named plaintiffs in the case are Patti Jo Cahoo, accused of filing a fraudulent claim in 2014;
Kristen Mendyk, who collected unemployment benefits for one year and was accused of making
a fraudulent claim in 2016; and Khadija Cole, who was laid off from the mortgage industry in
2014 and told one year later she owed the agency $29,000, according to the lawsuit.
The state has acknowledged the MiDAS system, which began auto-adjudicating unemployment
insurance fraud cases in October 2013, had a 93% error rate when its findings weren't reviewed
by humans. The state has already confirmed that more than 20,000 of about 50,000 fraud
findings made between October 2013 and August 2015 were false. That number is expected to
grow as the state reviews more fraud determinations during that period, though the second group
under review included at least some human involvement in determining fraud. The affected
claims date back as far as 2007, because MiDAS was used to do a six-year "look back" at earlier
claims.
The state contracted with SAS late in 2012. The $14.3-million contract includes services related
to Medicaid fraud detection and unemployment insurance fraud related to identify theft and
overpayment of benefits, according to state records.
An earlier federal lawsuit, filed against state defendants over the false fraud issue, was settled in
February. A class-action suit filed in state court continues.
Pengacara Detroit, Jonathan Marko mengajukan gugatan atas nama tiga penggugat
bernama yang menuduh mereka palsu dituduh melakukan penipuan, bersama
dengan ribuan Michigan penuntut asuransi pengangguran seperti mereka" pengadu
berhak bertekad untuk memiliki komitmen penipuan "tanpa dasar faktual."
terkait:
Jas menetap lebih dari klaim penipuan palsu terhadap Michigan pengangguran
Penuntut di pengangguran asuransi mimpi buruk janji: '. Tidak pernah lagi'
Gugatan juga nama dua vendor negara lainnya: SAS Analytics dari North Carolina
dan CSG Government Solutions of Chicago, menuduh mereka juga terlibat dalam
upaya deteksi penipuan biro pengangguran.
"Ini akan mengambil penemuan lebih lanjut melalui proses litigasi untuk dijabarkan
siapa sebenarnya yang melakukan," kata Marko Free Press.
Pejabat di SAS dan CSG tidak memiliki komentar segera Kamis.
The state and the UI Agency tidak disebut sebagai terdakwa dalam gugatan.
Penggugat bernama dalam kasus adalah Patti Jo Cahoo, dituduh mengajukan klaim
penipuan pada tahun 2014; Kristen Mendyk, yang mengumpulkan tunjangan
pengangguran selama satu tahun dan dituduh membuat klaim palsu pada tahun
2016; dan Khadijah Cole, yang diberhentikan dari industri hipotek pada tahun 2014
dan mengatakan satu tahun kemudian ia berutang agen $ 29.000, menurut
gugatan.
Negara telah mengakui sistem Midas, yang mulai auto-mengadili kasus penipuan
asuransi pengangguran pada bulan Oktober tahun 2013, memiliki tingkat kesalahan
93% ketika temuannya tidak ditinjau oleh manusia. Negara telah mengkonfirmasi
bahwa lebih dari 20.000 dari sekitar 50.000 temuan kecurangan yang dilakukan
antara Oktober 2013 dan Agustus 2015 adalah palsu. Angka itu diperkirakan akan
tumbuh sebagai negara lainnya. Ulasan penentuan penipuan selama periode itu,
meskipun kelompok kedua dikaji termasuk setidaknya beberapa keterlibatan
manusia dalam menentukan penipuan. Klaim yang terkena tanggal kembali sejauh
2007, karena MIDAS digunakan untuk melakukan enam tahun "melihat kembali" di
klaim sebelumnya.
Negara kontrak dengan SAS akhir tahun 2012. kontrak $ 14,3 juta termasuk layanan
yang berkaitan dengan deteksi penipuan Medicaid dan penipuan asuransi
pengangguran terkait untuk mengidentifikasi pencurian dan kelebihan pembayaran
manfaat, menurut catatan negara.
Sebuah gugatan federal yang sebelumnya, diajukan terhadap terdakwa negara atas
masalah penipuan palsu, telah diselesaikan pada bulan Februari. Gugatan class
action yang diajukan di pengadilan negara terus.