New York UI Wants $30,000 Back

My question involves unemployment benefits for the state of: New York
In 2003 me and my wife worked for a company that went bankrupt so at 35 y/o we were both out of a job with no health insurance. We were trying to have a baby before it was too late so the 1st thing I did was look into Health insurance at the lowest quote I got was $2000/ mo but if I had a Business it was under $400/mo so I went to the courthouse and filed a partnership with my wife (We did get the health insurance and thank god because a few months later she was pregnant)In the meantime we both were looking for work , I went on interviews and always filled the weekly questionnaire honestly. Now 9 years later I received a letter that says we both owe $15,000 back - Can they seriously do this ?

what is their justification for the demand?

Did you have earnings from your business that you failed to report? Did you notify UI that you owned a business and was employed by that business?

They didn't say - Just mailed me a letter due to fraud - Being that there was no fraud (Job closed, I went on interviews , Answered weekly questionnaires truthfully, Paid taxes on unemployment) I can only assume it was filing the partnership in the courthouse - I had no earnings I failed to report and I am not sure if I notified them that I had a business being that when I started it it was only to get affordable health insurance (this was 9 years ago so i don't remember) - I do know I answered every question truthfully , I cant remember the questions but I think it said "Did you make more than $??? in self employment"" my answer would have been NO because I didn't- After unemployment ran out and not being able to find a job I did focus on making this business actually happen (Met with SCORE people for advise) and it did but that was only after unemployment ran out and my back was up against the wall to get something going (Pregnant wife, Rent due) So I went at it full force

It would appear that you will need to produce all of your tax documentation for your business to establish that the business did not earn a profit (or possibly any revenue) during the period you received unemployment insurance benefits. You did not commit fraud if the business took off after your benefits ceased.

Additionally, with $30K on the line, you may want to consult with a New York attorney directly. Armed with the tax documentation concerning the business revenue during the relevant period, you will want to have knowledgeable counsel fight this battle for you and your wife.

NYS Unemployment got after a friend of mine who did exactly what you did, and UI demanded return of all UI paid with penalties. They threatened to take my friend to court, and since my friend felt he did nothing wrong, he responded "I'll see you in court".

My friend registered an "import export" business", did not make any money the year or so he did it, and in fact lost money and had writeoffs on his tax return for the time in question. He was all ready to bring his tax returns to court to show the judge, because everyone told him he should be OK as he made no money, but the UI people asked him to bring along his telephone records instead for the time in question.

Apparently UI obtained all of his phone records for the period, went down a list of names and numbers he called in court and asked him to identify which ones were the ones where he searched for work. Well, as it turned out, there wasn't any as they were mostly overseas and he testified he was looking for employment locally. UI then asked him to identify all the other numbers that he called during business hours, and they turned out to be with these foreign business contacts, or just chatting with friends.

At the end of the questioning, the judge asked my friend what percentage of time he spent establishing his new business, versus looking for work. He answered 50/50. The judge then said based on the evidence before him, it appears to be less than 1% looking for work, if that.

And because he made UI take him to court, he got hit with full interest and penalties as he turned down their offer of just paying back the UI paid.

I can't say my friend case is the same as yours, but the point made to him was while he was on UI, he should've looked for work full time. Afterwards, he told me he didn't think UI can prove he was not seriously looking for work.

Based on what I learned from the case, DON'T chat with your buddies, the same ones each day, hours at a time during business hours.

Almost sounds like the state is claiming that because you started a business that your UI ended at that time. Answering 50/50 to that question likely doomed him. How can one be available for work and still be running a business or setting one up for a full time business adventure.

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I had no earnings I failed to report and I am not sure if I notified them that I had a business being that when I started it it was only to get affordable health insurance (this was 9 years ago so i don't remember) -

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that, especially coupled with this:

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After unemployment ran out and not being able to find a job I did focus on making this business

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I believe is very problematic. First, you have to be able to accept any suitable work. If you are running a business, obviously you cannot do that. Then, there is the problem of you being in control of the company and failing to hire yourself to do work and be paid. The action immediately following the exhaustion of your UI tends to show you were intentionally not performing work for pay (which would DQ you) or you fraudulently hid income (again, DQ for UI plus outright illegal).

I would suggest paying for a consultation with a lawyer who can review the specifics of your situation and advise you. Given that you risk owing $30k, and more if they have to fight you for it, it would be worth the money you spend on a lawyer.

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Quoting jk

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I would suggest paying for a consultation with a lawyer who can review the specifics of your situation and advise you. Given that you risk owing $30k, and more if they have to fight you for it, it would be worth the money you spend on a lawyer.

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A lawyer may cost 10-15K to handle this case so I would not argue with seeking legal consul but the OP should be aware of the costs associated with a trial. I think the OP has no case to argue & fighting it further is futile.

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Quoting davidmcbeth3

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A lawyer may cost 10-15K to handle this case so I would not argue with seeking legal consul but the OP should be aware of the costs associated with a trial. I think the OP has no case to argue & fighting it further is futile.

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I would wonder if there is a statute of limitations issue here. In NY it is 6 years from the discovery for a civil action to be commenced. Not sure of the criminal limitations but I believe it is 5 years. Depending on when the state discovered, or should have discovered the suspected fraud, they may not be able to take any action concerning this.

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Quoting jk

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I would wonder if there is a statute of limitations issue here. In NY it is 6 years from the discovery for a civil action to be commenced. Not sure of the criminal limitations but I believe it is 5 years. Depending on when the state discovered, or should have discovered the suspected fraud, they may not be able to take any action concerning this.

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Wonder if leaving the country has an effect?